Articles Tagged With: Home Equity Loan

November 16, 2016

FHA Reverse Mortgage Counseling

We addressed FHA reverse mortgages in a recent blog post, discussing several aspects of these home equity conversion mortgages. One thing that makes the FHA reverse mortgage program unique from FHA refinance loan options is that these types of loans (also known as FHA HECM loans) are only for qualified borrowers age 62 or older who own or almost own their homes outright. The FHA official site describes HECM loans as follows: “If you are a homeowner age 62 or older and have paid off your mortgage or paid down a considerable amount, and are currently living in the home, you may participate in FHA’s Home Equity Conversion Mortgage (HECM) program. The HECM is FHA’s reverse mortgage program that enables you to withdraw a portion of your home’s equity. You | more...

November 15, 2016

FHA Refinance Loans and HECM Reverse Mortgages

By Joe Wallace

There are two types of FHA loans borrowers should know about when considering their refinance loan options. One is a traditional cash-out or no cash-out refinance loan, and the other is a reverse mortgage, also known as an FHA HECM loan. HECM stands for Home Equity Conversion Mortgage. The standard refinance loan and FHA HECM options are very different and serve different needs, but depending on the borrower it may be good to be familiar with both. Typical FHA refinance loans involve situations where the borrower typically has an existing mortgage and applies for a new loan that pays off the original mortgage, creating a brand new monthly payment, loan term, etc. Depending on the terms of the loan cash back may or may not happen, but for cash-out refinancing | more...

August 1, 2016

HUD Announces Settlement In Pennsylvania Housing Discrimination Case

By Joe Wallace

The Department of Housing and Urban Development has announced a settlement in a Pennsylvania housing discrimination case involving a loan applicant on maternity leave. According to the press release on the HUD official site, “…a Conciliation Agreement with Philadelphia-based Citizens Bank of Pennsylvania and Providence, Rhode Island-based Citizens Bank, collectively known as Citizens Bank, settling allegations that the bank violated the Fair Housing Act when it told a female applicant that she would need to return to work before her application for a home equity line of credit could be approved.” Fair Housing Act laws state that it is illegal to discriminate against borrowers, “in the terms, conditions, or privileges associated with the sale or rental of a dwelling on the basis of familial status”, which includes denying a mortgage | more...

July 21, 2016

FHA Revises HECM Policy To Include Third Party Tax Verification Fee

By Joe Wallace

FHA loan rules for Home Equity Conversion Mortgages (HECM) have been modified by the agency to include approval of third party fees for property tax verification. According to FHA Mortgagee Letter 2016-10, the third party fees will be added to the list of approved charges associated with FHA HECM loans, but the verification fees must meet FHA requirements. “A Third Party Property Tax Verification Fee is a fee charged to the mortgagee by a third party to verify the mortgagors property tax payment history and the annual amount of property taxes due for a specific property” states the FHA Mortgagee letter. “FHA is adding the Third Party Property Tax Verification Fee to the list of allowable charges and fees that may be paid by the mortgagor.” According to the mortgagee | more...

July 21, 2016

More About FHA Loans For Home With PACE Assessments

By Joe Wallace

Recently we wrote a blog post about FHA plans to allow qualifying homes with PACE assessments to be purchased with FHA mortgages. The FHA announced this recently in order to help promote energy efficiency (PACE stands for Property Assessed Clean Energy and may be assessed in a manner similar to property taxes.) The FHA issued a mortgagee letter explaining how and why a property with a PACE assessment may be eligible for an FHA mortgage. Past issues with PACE include being considered a “first lien” on the property. FHA loan rules explain how new guidelines can permit a home with PACE to be purchased with an FHA mortgage: “Properties which will remain encumbered with a PACE obligation may be eligible for FHA-insured mortgage financing, provided that the mortgagee determines that | more...

June 7, 2016

FHA Reverse Mortgage Questions And Answers

By Joe Wallace

The FHA reverse mortgage, also known as a Home Equity Conversion Mortgage, is a special type of FHA mortgage loan. Not everyone can qualify for an FHA reverse mortgage-there are specific age requirements, occupancy requirements, and more. We are often asked about reverse mortgages, here are some of the most commonly asked FHA HECM loan questions and their answers. Who can qualify for an FHA HECM / Reverse Mortgage loan? The FHA reverse mortgage program (HECM loans) is intended for borrowers aged 62 or older who either own their property outright or are very close to doing so. Proof of loan payoff will be required, and all FHA HECM loan applicants will be required to certify that the home securing the reverse mortgage is the primary residence and not a | more...

What happens to my FHA loan in a natural disaster?

May 25, 2016

FHA Reverse Mortgages: Payout Options

By Joe Wallace

Recently we wrote about proposed changes to strengthen the FHA Reverse Mortgage loan program and about basics of the FHA Reverse Mortgage program. We left off with a promise to discuss how the reverse mortgage, also known as an FHA Home Equity Conversion Mortgage (HECM), pays out once the loan has closed. A HECM borrower’s payout (also known as a disbursement) depends on the nature of the HECM loan. The rules for cash back to the borrower differ based on whether the borrower has a fixed interest rate HECM loan or an adjustable rate HECM. The FHA/HUD official site states that borrowers who have adjustable rate HECM loans are eligible for the following payment options: Tenure-equal monthly payments as long as at least one borrower lives and continues to occupy | more...

May 19, 2016

What is an FHA Reverse Mortgage?

By Joe Wallace

In a recent blog post we wrote about the steps the FHA and HUD are taking to further improve the FHA Home Equity Conversion Mortgage (HECM) loan program. The FHA HECM, also known as a reverse mortgage or FHA reverse mortgage, is a different type of home loan than a typical “forward mortgage” for a new purchase or refinance on a previous mortgage. The FHA reverse mortgage or HECM is for qualified borrowers age 62 or older who either own their property outright (with the mortgage paid off in full and documentation of that paid-in-full status) or are very close to paying off the current loan. According to the FHA official site, HECM loans are a “…special type of home loan that lets you convert a portion of the equity | more...

May 19, 2016

FHA Proposes New Rule To Strengthen Reverse Mortgage Program

By Joe Wallace

The FHA has announced a new proposed rule intended to strengthen the Home Equity Conversion Mortgage (HECM) loan program. According to the FHA official site, the proposal would “codify several significant changes to FHAs Home Equity Conversion Mortgage program that were previously issued under the authority granted to HUD in the Housing and Economic Recovery Act of 2008 and the Reverse Mortgage Stabilization Act of 2013, and to make additional regulatory changes”. A press release at FHA.com states the new rule would, once approved, “make certain FHA-insured reverse mortgages remain a viable and sustainable resource for senior homeowners hoping to remain in their homes and age in place.” The agency has spent the last two years working on reforms intended to improve the FHA HECM program. “We’ve gone to great | more...

When Is An FHA Loan Better Than A Conventional Loan?

January 21, 2016

FHA HECM Loan Facts And Questions

By Bruce Reichstein

In our last blog post we discussed some of the basics about the FHA reverse mortgage loan program known as the Home Equity Conversion Mortgage. Here are some commonly asked questions about the program and the answers you should know: What Are The Property Requirements For An FHA Reverse Mortgage? According to the FHA official site, properties eligible for an FHA reverse mortgage must meet all FHA property standards and flood requirements. The eligible property types are: –Single family home or 2-4 unit home with one unit occupied by the borrower –HUD-approved condominium project –Manufactured home that meets FHA requirements Are Manufactured Homes Eligible For FHA Reverse Mortgages? As mentioned above, FHA loan rules do technically permit HECM loans for mobile homes. However the participating lender may or may not | more...