What is a Home Equity Conversion Mortgage (HECM)?

A HECM is the most popular Reverse Mortgage program.

This program is the only one that is backed by the Federal Government through the Federal Housing Administration. The funds that are disbursed through this HECM program is, normally, the greatest amount allowed by any of the Reverse Mortgage programs. The HECM is insured through the government and allows for the protection of the borrower, if the lender defaults.

The funds disbursed to the borrower may be used for any purpose. They are based upon age of borrower(s) and the property value as well as the allowable FHA loan limit. Each personal situation will determine the amount that is allowed. These funds can be taken in a lump sum; or in a set amount that can be paid to the borrower each month for the life of the loan (Tenure Option; or set payments for a period of time (Term Option). Or the funds may be collected in a combination of lump sum payments with the balance being placed into a Line Of Credit. This remaining Line of Credit (LOC) will receive interest based upon the amount of the interest that is being charged. The rate received is normally higher than what is being charged.

THERE ARE NO MONTHLY PAYMENTS in order to repay the loan.

Any one that reaches 62 years of age or older and owns their own home is eligible to participate in the program. The home must be a 1 – 4 family house, or condo, and you must live in the property. You must participate in a counseling session with a HUD approved counselor. We will be happy to assist you and provide the names of the appropriate counselors in your area.

This loan may be repaid at any time and YOU ALWAYS retain the title to your home, until YOU decide to sell.

There are other aspects of the program which may pertain to your individual situation.
Please do not hesitate to contact me to clarify your eligibility in the program. Or if you have any questions, please call.

Joe Dowd