This program was designed for senior homeowners of the age 62 or older. HECM (Home Equity Conversion Mortgage) enables seniors to take the equity of their home and turn it into a stream of income. They may also use it for a line of credit. This is to be repaid when the owner no longer occupies the home.

Homeowners age 62 or older have little or no mortgage payments left on their property. This program allows these homeowners to borrow money from the equity of their home. There are five different payment options for their loan.

These reverse mortgages are non recourse which means you could never own more than the value of the home. As long as the homeowner remains on the title of the property as the main resident, a HUD reverse mortgage does not require payment. When the home is sold or the lenders recover the principal owed on the house plus interest. The remaining value goes to the homeowner or the survivors. Best of all, this loan is TAX-FREE!

If the sale proceeds are insufficient to pay the amount owed, HUD will pay the lender the amount of the shortfall. HUD’s Federal Housing of Administration (FHA) collects an insurance premium to provide this coverage.

Generally the more valuable your home is, the older you are, the lower the interest, the more you could borrow. The loan amount can depend on your age, current interest rate, other loan fees and appraised value of their home or FHA mortgage limits for the area the property is in.

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