Top Ten Things to Know if You are Interested in a Reverse Mortgage

FHA Reverse Mortgages.

HUD Reverse Mortgages:

• 1. What is a reverse mortgage?
• A reverse mortgage is a special type of home loan that lets a homeowner convert a portion of the equity in his or her home into cash. The equity built up over years of home mortgage payments can be paid to you. But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence. HUD's reverse mortgage provides these benefits, and it is federally-insured as well.
• 2. Can I qualify for a HUD reverse mortgage?
• To be eligible for a HUD reverse mortgage, HUD (FHA) requires that the borrower is a homeowner, 62 years of age or older; own your home outright, or have a low mortgage balance that can be paid off at the closing with proceeds from the reverse loan; and must live in the home. You are further required to receive consumer information from HUD-approved counseling sources prior to obtaining the loan. You can contact the Housing Counseling Clearinghouse on 1-800-569-4287 to obtain the name and telephone number of a HUD approved counseling agency and a list of FHA approved lenders within your area.
• 3. Can I apply if I didn't buy my present house with FHA mortgage insurance?
• Yes. While your property must meet HUD minimum property standards, it doesn't matter if you didn't buy it with an FHA insured mortgage. Your new HUD reverse mortgage will be a new FHA-insured mortgage loan.
• 4. What types of homes are eligible?
• Your home must be a single family dwelling or a two-to-four unit property that you own and occupy. Townhouses, detached homes, units in condominiums and some manufactured homes are eligible. Condominiums must be FHA-approved. It is possible for condominiums to qualify under the Spot Loan program. The home must be in reasonable condition, and must meet HUD minimum property standards. In some cases, home repairs can be made after the closing of a reverse mortgage.
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