Features

Non-Taxable “Income” (TAX FREE MONEY)

The funds received by the borrower from a Reverse Mortgage are not really income. They are loan proceeds. Therefore, it is not subject to income tax, as income would be. (With this or any other income tax or legal questions, be sure to speak to a qualified accountant or legal advisor).

Program Changes “Midstream”

Borrower can change from a monthly income to a larger one-time cash payment, even after the loan is set up. Borrower can make multiple changes over the life of the loan, paying a small administrative fee for each change (around $50.00).

No Loan Balance “Overage”

The property stands for the loan. Heirs, or the borrower’s estate will not be liable for loan balances that exceed the property value or sales proceeds at the time the borrower leaves the property.

Borrower Requirements

You must:

• Be of age 62 years or older (all borrowers on title must be at least 62 years or older and living in the home)
• Own the property outright or have paid-down the mortgage by a considerable amount
• Occupy the property as your principal residence
• Not be delinquent on any federal debt
• Have financial resources to continue to make timely payment of ongoing property charges such as property taxes, insurance, and Homeowner Association fees, etc.
• Participate in a consumer information session given by a HUD- approved HECM counselor

There are no medical requirements – No medical examination or other reference to borrower’s medical condition is required.

Mortgage amount is determined by

• Dates(s) of birth of borrower(s) [Age of the youngest borrower]
• Zip code and property address
• Loan Limits for County in which property is located (Lesser of appraised value or the FHA insurance limit)
• Prevailing interest rates (The interest rate at the time of loan closing impacts how much interest will accrue during the life of the loan, so it impacts the maximum loan that can be granted to the borrower). Please Note: The loan amount is based on current interest rates. If interest rates increase in the future, the loan amount at that time may be less.

Financial Requirements

• No income or credit qualifications are required of the borrower (even if borrower has late payments, Notice of Default Filed, or recent
• Bankruptcy discharge. Why? Because the Lender is not relying on the borrower making monthly mortgage payments.
• No repayment as long as the property is the primary 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 2-4 unit home with one unit occupied by the borrower
• HUD-approved condominium project
• Manufactured home that meets FHA requirements