A Reverse Mortgage or Home Equity Conversion Mortgage (HECM) is a special type of senior home loan program that converts a portion of the home equity into cash, while allowing ownership of the property to remain with the borrower.

Unlike a traditional Home Equity Loan or Second Mortgage, no repayment is required until the senior no longer uses the home as their principal residence. Additionally, there is no income verification, no credit requirements and no asset verification needed. A Reverse Mortgage provides these benefits without affecting Social Security and Medicare and it is federally insured.

The Federal Housing Authority (FHA) that administers this program has the following guidelines and requirements:

	The borrower must be a homeowner, 62 years of age or older.
	Must live in the home as their primary residence.
	The borrower never loses title of the home and can pass the title on to their heirs at the time of death or permanent move-out.
	Must have a low enough mortgage balance that can be paid off at the closing with the Reverse Mortgage proceeds or have no mortgage at all.
	The borrower is further required to receive consumer information from a HUD-approved counseling agency of their choosing, prior to obtaining the loan.
	Lender must do what is in the best interest of the client as seniors are a protected class.

Reverse Mortgages are a federally regulated program. The Federal Housing Authority (FHA) issues the Mortgage Insurance for these loans to protect the consumer and the lender. The FHA mandates that all seniors have counseling on the program from a HUD-approved counseling agency. For information about counseling please contact your Reverse Ultra Associate today!