Reverse Mortgage News
There are many Seniors that want to purchase a home, but do not have enough money to pay cash for their Bonita Springs home. They may have a substantial down payment, but still cannot qualify for a loan. Their credit may not be good, or their pension may not qualify them for a re-payment program.
The "Hope for Homeowners" legislation that was passed and signed into law by President Bush on July 30, 2008 made mention of a purchase program for Reverse Mortgages, and we have been waiting since then to see when we could start making these loans, and how they would be structured. When HUD released their Mortgagee Letter #2008-33 we now have some of the details of the program that will become available on January 1, 2009.
Beginning in 2009 Seniors (over 62) will be able to purchase a home with a Reverse Mortgage. Credit and income will not be a factor. A down payment, based on the age of the borrower, will enable the purchase of a home with a loan not requiring any repayment plan. The home will be theirs to own for the rest of their life as long as they live in it. They will own the home, and be able to pass any equity to their heirs.
Upon the sale of the house should there be any shortfall between the value of the home and the amount owed (possible through decline in value) the FHA will pay that difference. At no time will the borrower ever be faced with a short sale scenario, or will the heirs ever worry about a shortfall attaching any other assets.
The loan is a NON recourse loan. Only the house that has been encumbered by the mortgage can be looked to for repayment.
Down payment sources can even come from gifts or other FHA allowable funding sources. We may even see the return of the seller paid down payment programs at some time in the future, but currently these are not allowed on any FHA loan. (11/12/2008)
With the beginning of the new year Seniors can move closer to family, purchase homes with wider doorways, or even downsize to meet their current housing needs.
For more information on this, or any other loan program, please give Bob at Tomasso Mortgage a call.
Licensed Mortgage Broker, Principal Broker
A Licensed Correspondent Mortgage Lender, since 1989