A reverse
mortgage, or Home Equity Conversion Mortgage (HECM), is a
loan that enables homeowners over the age of 62 to use their
home’s equity without
selling their home or moving from it. There are no minimum
income or credit requirements, but there are other requirements
and homeowners should make sure that they qualify for the loan
before they invest significant time or money into the process.
The
amount you can borrow depends on your age, the current interest
rate, other loan fees, and the appraised value of your home
or FHA’s HECM mortgage limit for your area, whichever is less.
Generally, the more valuable your home is, the older you are,
and the lower the interest, the more you can borrow. If there
is more than one owner, the age of the youngest owner is used
to determine the amount you can borrow.
To apply for an FHA/HUD
reverse mortgage, a borrower is required to complete a 45-minute
counseling session with a HUD-approved counselor. The counselor
will explain the legal and financial obligations of a reverse
mortgage. After the counseling session, the borrower receives
a "certificate of counseling" that
is required before the loan application can be processed.
Borrower Requirements
| |
 |
Be 62 years of age or
older |
|
| |
|
Own the property outright or have a
small mortgage balance |
|
| |
|
Occupy the property as your principal
residence |
|
| |
|
Not be delinquent on any federal debt |
|
| |
|
Participate in a consumer information
session given by an approved HECM counselor |
Mortgage Amount Based On
| |
|
Age of the youngest borrower |
|
| |
|
Current interest rate |
|
| |
|
Lesser of appraised value or the HECM
FHA mortgage limit |
Financial Requirements
| |
|
No income or credit qualifications
are required of the borrower |
|
| |
|
No repayment as long as the property
is your principal residence |
|
| |
|
Closing costs may be financed in the
mortgage |
Property Requirements
The following eligible property
types must meet all FHA property standards and flood requirements:
| |
|
Single family home or 1-4
unit home with one unit occupied by the borrower |
|
| |
|
HUD-approved condominium |
|
| |
|
Manufactured home that meets FHA requirements |
TO SET UP A COUNSELING
APPOINTMENT PLEASE CALL: 303-784-7856 |
