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FHA HECM Reverse Mortgage Programs

Senior couple in their condominiumThe HECM reverse mortgage program is backed by HUD (The U.S. Department of Housing and Urban Development) and insured by the FHA. To be eligible for a HECM, FHA states that you must be sixty-two years of age or older, and either own your home free-and-clear or have a low enough balance that the loan can be paid off with a reverse mortgage. Also, the senior must live in the home as their primary residence. 1-4 unit properties, HUD approved condominiums, and a limited number of manufactured homes may qualify if they meet FHA’s requirements.

FHA Reverse Mortgage Program Highlights (HECM reverse mortgage):

  • Backed by HUD
  • Insured by Federal Housing Administration (FHA)
  • No repayment required as long as person lives in the home
  • Remaining value goes to survivors
  • No income or credit qualifications required
  • Payments can be made in one lump sum, on a monthly basis for a specific amount of years, monthly income for life (Tenure Payment) left in a line of credit and grow in value or a combination of all of them
  • Size of loan determined by borrower’s age, interest rate, and the value of the property
  • No limits on value of property. However, the entitlement amount will be capped by the FHA ceiling for designated area
  • A reverse mortgage is what we call a non-recourse loan. This means that with a reverse mortgage you are not personally liable. The liability is only to the extent of the value of your home at time of sale, death or vacating the premises as your permanent residence. Your heirs are not personally liable; they can either sell the home at time of your death or keep the home and pay off the remaining balance of the Reverse Mortgage.

Please keep in mind that the reverse mortgage industry in constantly changing and some of the information contained on this site may not be current. Please ask a licensed reverse mortgage professional for up-to-date guidelines. You can also learn about some of the misconceptions people have of reverse mortgages in our FAQ area.

Another topic you might find helpful: Understanding the steps in the reverse mortgage process.