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14.183 Home Equity Conversion Mortgages
HOUSING, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
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:
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.
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.
Pre-application Coordination: This program is excluded from coverage under OMB Circular No. A-102 and E.O. 12372.
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.
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.
Account Identification: 86-4077-0-3-371.
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.
Regional or Local Office: None. Persons are encouraged to contact the FHA Resource Centerfor more information at 1-800-CallFHA or 1-800-225-5342.
EXAMPLES OF FUNDED PROJECTS:
CRITERIA FOR SELECTING PROPOSALS: