FEDERAL
AGENCY:
HOUSING,
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
AUTHORIZATION:
National
Housing Act, as amended; Housing and Community Development Act of
1987, Section 417, Public Law 100-242, 12 U.S.C. 1715z-20.
To
enable elderly homeowners to convert equity in their homes to monthly
streams of income or except for Texas - lines of credit.
TYPES
OF ASSISTANCE:
Guaranteed/Insured Loans.
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USES
AND USE RESTRICTIONS:
HUD
insures lenders against loss on reverse mortgage loans. These loans
may be used to provide monthly streams of income or except for Texas
- lines of credit for older homeowners, 62 years of age or older.
ELIGIBILITY
REQUIREMENTS:
Applicant
Eligibility: Eligible borrowers are persons
62 years of age or older. Eligible properties include Single Family
one-to-four unit owner-occupied dwelling units, condominiums and
Planned Unit Developments, if they meet FHA standards, and manufactured
homes, if they meet FHA standards.
Beneficiary
Eligibility: Individuals.
Credentials/Documentation:
Documentation regarding the characteristics of the property and
the qualifications of the mortgagor are assembled by the mortgagee.
This program is excluded from coverage under OMB Circular No.
A-87.
APPLICATION
AND AWARD PROCESS:
Pre-application
Coordination: This program is excluded from
coverage under OMB Circular No. A-102 and E.O. 12372.
Application
Procedure: The borrower is required to receive
counseling from a HUD-approved counseling agency prior to application.
Approved Direct Endorsement Lenders process all aspects of the
loan application and submit it to HUD for insurance endorsement.
This program is excluded from coverage under OMB Circular No.
A-110.
Award
Procedure: See Application Procedure.
Deadlines:
None.
Range
of Approval/Disapproval Time: Varies.
Appeals:
Mortgagee will state the reasons for refusing an application.
The applicant may reapply subject to concurrence of the lender.
Renewals:
Not applicable.
ASSISTANCE
CONSIDERATIONS:
Formula
and Matching Requirements: Payments that a borrower
can receive from a reverse mortgage are determined by calculating
the principle limit. This is determined at closing using a factor
corresponding to the age of the youngest borrower, the interest
rate, and the value of the home. Mortgage insurance premiums will
be collected including: 1) an up-front premium which may be financed
and 2) a periodic premium which is paid monthly. The loan origination
charge by the mortgagee varies, but the financed portion may not
exceed the greater of 2 percent of maximum claim amount or $2,000.
Mortgagors may be charged appraisal and inspection fees in accordance
with fee schedules established by HUD. These charges may also be
financed.
Length
and Time Phasing of Assistance: The mortgage
has no specified term. The mortgage is due and payable at the
death of the borrower(s) or if the borrower sells, conveys, or
moves from the property.
POST
ASSISTANCE REQUIREMENTS:
Reports:
Defaults in meeting the mortgage terms must be reported. All approved
mortgagees at any time upon request by HUD must furnish a copy of
their latest financial statement.
Audits:
The Department of Housing and Urban Development reserves the right
to audit the account of the mortgagee to determine its compliance
and conformance with HUD regulations and standards.
Records:
Mortgagees are required to service and maintain records in accordance
with acceptable mortgage practices of prudent lending institutions
and the HUD regulations.
FINANCIAL
INFORMATION:
Account
Identification: 86-4077-0-3-371.
Obligations:
(Mortgages insured) Reported under program 14.133.
Range
and Average of Financial Assistance:
Payments that a borrower can receive from a reverse mortgage are
determined by calculating the principle limit. This is determined
at closing using a factor corresponding to the age of the youngest
borrower, the interest rate, and the value of the home or the
FHA Limits whichever is less.
PROGRAM
ACCOMPLISHMENTS:
In fiscal year 2001, 7,781 loans were insured and the Departments
expects to insure approximately 8,000 loans in fiscal year 2002.
REGULATIONS,
GUIDELINES, AND LITERATURE:
"Options
for Elderly Homeowners: A Guide to Reserve Mortgages and Their Alternatives,"
no charge; 24 CFR 200 and 206.
INFORMATION
CONTACTS:
Regional
or Local Office: Persons are encouraged to contact
the Homeownership Center serving their State, or the nearest HUD
Office. See Catalog Address Appendix IV for a list of Offices.
Headquarters
Office: Director, Insured Family Development
Division, Office of Single Family Housing, Department of Housing
and Urban Development, Washington, DC 20410. Telephone: (202)
708-2121. Use the same number for FTS.
Web
Site Address: http://www.hud.gov/progdesc/hecm--df.cfm
EXAMPLES
OF FUNDED PROJECTS:
Not applicable.
CRITERIA
FOR SELECTING PROPOSALS:
Not applicable.
