"FEDERAL HOUSING AUTHORITY (FHA'S)
REVERSE MORTGAGE OR HOME EQUITY CONVERSION MORTGAGE (HECM) PROGRAM"
Across the USA
"Reverse mortgages are increasing in popularity with seniors who have equity in their homes and want to supplement their income. The only reverse mortgage insured by the U.S. Federal Government is called a Home Equity Conversion Mortgage or HECM, and is only available through an FHA approved lender."
"A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. The equity that you built up over years of making mortgage payments can be paid to you. However, unlike a traditional home equity loan or second mortgage, HECM borrowers do not have to repay the HECM loan until the borrowers no longer use the home as their principal residence or fail to meet the obligations of the mortgage."
The Federal Housing Authority (FHA's) Reverse Mortgage or Home Equity Conversion Mortgage (HECM) Program is for senior homeowners age 62 or older who have paid off their mortgage or have paid down a considerable amount, and are currently living in the home.
Seniors can choose how they would like to withdraw funds, such as a fixed monthly amount, a line of credit or a combination.
Seniors must meet with a Home Equity Conversion Mortgage counselor to discuss the program’s eligibility requirements, financial implications and alternatives. The aim of the program is for seniors to ultimately make an independent and informed decision.
The Federal Housing Authority (FHA's) Reverse Mortgage or Home Equity Conversion Mortgage (HECM) Program website has a reverse mortgage calculator to help seniors find out if they qualify along with a list of FHA-approved lenders.
Seniors who want a Reverse Mortgage must:
- Be 62 years of age or older.
- Own the property outright or paid-down a considerable amount.
- Occupy the property as your principal residence.
- Not be delinquent on any federal debt.
- Participate in a consumer information session given by a HUD-approved HECM counselor.
Seniors can select from five payment plans:
- Tenure - equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.
- Term - equal monthly payments for a fixed period of months selected.
- Line of Credit - unscheduled payments or in installments, at times and in an amount of your choosing until the line of credit is exhausted.
- Modified Tenure - combination of line of credit and scheduled monthly payments for as long as you remain in the home.
- Modified Term - combination of line of credit plus monthly payments for a fixed period of months selected by the borrower.
WATCH VIDEO ON HOW REVERSE MORTGAGES WORK