The Home Equity Conversion Mortgage “HECM for Purchase” Program can help senior buyers with a new home purchase. Baby boomers are the fastest growing demographic group in the US and they are changing the face of the reverse mortgage industry by selecting reverse mortgages in greater numbers than their elders. And now, this HECM Purchase program allows them to purchase a new principal residence using loan proceeds from the reverse mortgage.
With a Home Equity Conversion Mortgage, you will enjoy the following benefits:
- FHA insured loan – Borrower’s loan and home are safe
- Non-recourse loan – this means that there is no recourse to the borrower, their estate or heirs if the HECM loan balance exceeds the home’s value at maturity as long as the borrower or their estate sell the property to pay off the debt. If the borrower or estate wants to retain the property, the balance must be paid in full. Any equity remaining in the property after the reverse mortgage is retired belongs to the borrower or their estate.
- No monthly mortgage payments – cash flow is preserved. Homeowner continues to pay insurance and property taxes, live in and maintain home. Home must be primary residence. Program not currently available in all states.
- Senior enjoys just one set of closing costs
- Potentially allows client additional savings for retirement needs.
- Homeowner retains title.
Use the powerful features of the Home Equity Conversion Mortgage program to:
- Downsize for more affordable living
- Relocate to be closer to family
- Purchase a single level, more accessible home
- Buy or sell a condo
- Purchase a more expensive home without incurring a monthly mortgage payment
Eligible Properties for the Home Equity Conversion Mortgage for purchase program
- Single family homes
- 1 – 4 unit properties
- Some manufactured homes
- Approved condominiums and townhouses
- Newly constructed properties must have certificate of occupancy. CO must be issued prior to 1009 application date.
- Homeowner must be 62 years of age or older.
- No second/vacation or investment homes.
- Present home must be in the name of borrower and primary residence.
- Must have considerable home equity or must provide monetary investment at closing from allowable funding source.
- Home meets minimum FHA property standards.
- Only HECM first and second liens against property.
- Occupy residence as primary property within 60 days.
- Mandatory counseling session.
- Taxes and home insurance are paid by your client and not escrowed.
For more information on our Home Equity Conversion Mortgage for purchase reverse mortgage, please contact Anthony DiLeo at (908) 482-7603 or email [email protected]