In short the Home Equity Conversion Mortgage (HECM), commonly know as a reverse mortgage, helps seniors who have about half or more of their primary residence paid off, which allows them to have 50% of equity to borrow from for the reverse mortgage. The reverse mortgage, has the bank pay the homeowner from the equity of the home, instead of having the homeowner keep on paying the bank. This allows the homeowner to use the hard earned equity they have accumulated over their lifetime in their property to be used for certain personal uses. There are different payment options, such as monthly, line of equity, or large sums, depending on your particular situation. This is a fairly new mortgage product that has been in use since the the 1960’s and became more popular in the 1980’s, obviously it is still restricted to the senior population due to its age requirement.

Whats great about this program is that there is no credit score or income requirements, although there are other requiremts which we mentione below. 

It is important to know that to qualify for a reverse mortgage the applicant MUST meet with a HUD approved counselor to go over how a reverse mortgage works. This HUD approved counselor does NOT make the reverse mortgage with a bank for you, but only helps you better acquaint yourself with how the reverse mortgage functions in your particular situation.

We can help you with this process, call us to connect you with the right lender and see what is your next step to qualify, (213) 590-3219. 

There is information about what the reverse mortgage is meant to do, and some of its requirements on this goverment website. www.HUD.gov

For a more detail explanation of how the reverse mortgage works and more detail on the requirements, go to this www.HUD.gov sub page.
(more below)

Common Questions Answerd

Can My Spouse and Children Still Keep My House?
Yes, your spouse will be able to live their rest of their life in the property, once you pass, as part of the contract with all newer reverse mortgage. As well your spouse or children can keep the house or even sell it, as long as they pay off the amount borrowed in the reverse mortgage loan that was give to you.  

What are the Borrower Requirements?

The homeowner or owners must be:

• 62 years of age or older
• Own the property outright or more than 50% equity
• Occupy the property as your principal residence
• There are NO Credit Score or Income requirements, but MUST NOT be delinquent on any federal debt

What are 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
• Individual Condominium Units that meet FHA Single Unit Approved requirements
• Manufactured home that meets FHA requirements

What are the Financial Requirements?

• Income, assets, monthly living expenses, and credit history will be verified
• Timely payment of real estate taxes, hazard and flood insurance premiums will be verified, if there is an issue we can work with you, to make sure your caught up.

What are the Payment Plan Options the bank will pay the homeowner?

There are fixed and adjustable rate reverse mortgages.

For fixed interest rate mortgages, you can recive a "Single Disbursement Lump Sum" with no more payments for the mortgage, and also to receiving monthly payments from the lender, there maybe other options available for you situation as well.

For adjustable interest rate mortgages, there are more options discriebed as follows: 

• 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

Mortgage Amount Based On

The amount you may borrow will depend on:

• Age of the youngest borrower or eligible non-borrowing spouse
• Current interest rate; and
• Lesser of:
  • appraised value;
  • the HECM FHA mortgage limit of $822,375 (as of 2021); or
  • the sales price (only applicable to HECM for Purchase