The Home Ownership and Economic Recovery Act of 2008 made many considerable improvements to the Government regulated and insured Home Equity Conversion Mortgage or HECM reverse mortgage. A higher national loan limit and more safeguards captured all of the early media coverage, but some changes to the HECM program present completely new opportunities for seniors navigating towards retirement.
The Reverse Mortgage Home Purchase program is one of these examples. This HECM program allows seniors over the age of 62 to purchase a home and obtain a reverse mortgage in one simultaneous transaction. This means you can put down a much smaller down payment and still be left with no monthly mortgage payment. The HECM home purchase program was designed to help seniors address three common needs: downsizing, relocating or purchasing a home. The Reverse Mortgage Home Purchase program:
• Eliminates required monthly mortgage payments synonymous with Forward loans;
• Increases the senior’s buying power by not requiring as much of a down payment;
• Requires virtually no credit, income, or job qualifications;
• Is limited to Primary residences; and
• Is available to seniors age 62 or older.
The Reverse Mortgage Home Purchase program is one of many terrific improvements to the Government insured HECM products that can help seniors stay in their homes while providing alternative funding solutions for their retirement. These HECM programs have long proven to be a valuable instrument for seniors and these new provisions make reverse mortgages more attractive than ever.
Here is great example of a couple who recently took advantage of the new HECM Reverse Mortgage Purchase Program:
Ryan and Michelle Townsend, both 62, have been trying to sell their home for nearly two years but haven’t had any luck, even after reducing their listing from $600,000 to $415,000. Their plan was to use the equity from the sale of their home and downsize to a new location, but with the housing market where it’s at, it hasn’t worked out that way. All of that changed when they found out about the HECM Reverse Mortgage Purchase Program which allowed them to purchase their dream retirement home in a beautiful retirement community in Naples, Florida.
Using a reverse mortgage purchase program, Ryan and Michelle Townsend made a $150,000 down payment from the equity they received in selling their home and used a reverse mortgage for the remaining $200,000 balance on the $350,000 home. “It’s just wonderful. We wanted this house so much,” Michelle Townsend said of their home in Naples, Florida. “This is truly a dream come true. We were able to keep a good portion of the equity from the sale of our old home in the bank as a safety net instead of dumping all of it into our new home and still have no monthly mortgage payment!”
If you are interested in learning more about the Reverse Mortgage Purchase Program or other information about reverse mortgages, please contact one of our experienced Senior Loan Advisors today. We work directly through HUD to provide outstanding customer service so we can provide you the home of your dreams.