August 23, 2010
Home Equity Conversion Mortgages, or HECM for short, are designed to help qualified borrowers take out an FHA guaranteed loan against the equity built up in their property.
HECM loans are intended for a specific segment of homeowner; FHA requirements for HECM loans include an age-specific restriction, plus qualifying ownership status, and restrictions on the type of property that can be used for a Home Equity Conversion Mortgage.
FHA requirements for HECM loans include a stipulation that the applicant be age 62 or older. Homeowners younger than age 62 are not eligible to apply for an FHA-insured HECM loan, but do have the option to apply for a traditional second mortgage instead.
HECM loans are offered only to those who either own their property and have completely paid off their mortgage, or have a mortgage balance low enough that it can be paid off when the HECM loan closes.
Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for FHANewsblog.com where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.
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