Reverse Mortgage Article 2
Over 62? Downsizing, Right-Sizing or Looking to Relocate? Check out the New Reverse Mortgage Purchase Program!
For the first time since it’s inception in 1989, seniors age 62 or
older, can use their reverse mortgage to purchase a new property! This
new program allows seniors to purchase a new principle residence and
obtain a reverse mortgage within a single transaction – eliminating the
need for a second closing and additional closing costs. The reverse
mortgage purchase program also allows seniors to relocate to another city
or state, bringing them closer to family or to a better climate.
What type of home is eligible for this purchase program?
Single-family homes, duplexes, triplexes and four-plexes are all eligible
for purchase with the new reverse mortgage purchase program. Condominiums
are also permitted under the new rules, as are manufactured homes,
provided they were built after June 15, 1976.
Properties that are not eligible under the new program would include; bed
and breakfasts, boarding houses, homes lacking a permanent foundation,
manufactured homes built prior to June 15, 1976, and cooperative units.
Guidelines
In light of the recent mortgage crisis, HUD has established guidelines to protect borrowers and avoid fraud, abuses and house flipping. Some of the guidelines include:
- Construction must be completed on new homes and prior to closing the loan, a Certificate of Occupancy must be issued.
- Funds must be verified by the lender prior to closing.
- As with all reverse mortgages, counseling is required for all potential borrowers.
- The standard three-day right of rescission period for a reverse mortgage is not applicable under the purchase program.
- The newly purchased property must be occupied within sixty days of closing.
- No liens against the property can exist upon closing.
- Resale of a property cannot occur 90 days or fewer from the last sale.
- Bridge loans or “gap” financing to meet down payment or cash requirements for the reverse mortgage are not permitted.
It should be noted that all reverse mortgage proceeds are based on
the lesser of the appraised value or sales price.
Reverse mortgages for purchasing is a wonderful tool allowing seniors to
supplement their retirement lifestyle. This program allows a senior to
put more money in their pocket each month, eliminate costly home
maintenance, re-locate to a better climate, to be closer to family, or
simply to downsize.
For Your Private In Home Consultation, Call Virginia Berry Today at 719-520-3326
“When Experience Counts” Find Out What a Reverse Mortgage Can Do for You
- Back to Reverse Mortgage Article Index -