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June 23, 2014
New FHA HECM Rules: Determining The Principal Loan Amount
Last week we reported on changes to the FHA Home Equity Conversion Mortgage loan program–changes announced by FHA and HUD that change the terms of the loan program for fixed rate HECMs and adjustable rate HECM loans. As of HECM loans with case numbers assigned on or after June 25, 2014, FHA HECM loans for fixed rate mortgages feature the following restrictions as per the FHA official site: “FHA will only insure fixed interest rate reverse mortgages where the mortgage limits the mortgagor to: –A single, full draw to be made at loan closing; and –Does not provide for future draws by the mortgagor under any circumstances.” The FHA also made changes to adjustable rate HECM loans–the FHA official site says: “The Single Disbursement Lump Sum payment option shall not | more...