Reverse Mortgage Products
- Home Equity Conversion Mortgage
- Fannie Mae Home Keeper Reverse Mortgage
- Proprietary Jumbo Products
- Home Equity Conversion Mortgage (HECM) reverse mortgages
- A Home Equity Conversion Mortgage (HECM) is a federally insured reverse mortgage. Ninety-five percent of all reverse mortgages are HECMs. The Federal Housing Administration (FHA) sets limits on how much an HECM reverse mortgage lender may lend you—based on your age, your home's value and location—and what your total loan costs will be. HECM loans give you a wide choice in how you may receive the cash from the reverse mortgage. HECM loans generally provide the larger loan advances than other reverse mortgages (if you go over the HECM loan limits, you would then look at the Jumbo Cash Account Plan).
- Fannie Mae Home Keeper® Reverse Mortgage
- A Home Keeper® reverse mortgage is Fannie Mae's conventional market alternative to the Home Equity Conversion Mortgage (HECM). It is a government-sponsored enterprise program and works like a HECM loan in many ways. However, a Home Keeper® reverse mortgage addresses a few needs that are not met by HECM loans, such as individuals with higher property values, condominium owners, and seniors wishing to use a reverse mortgage to purchase a new home.
- Proprietary Jumbo Products Available
- There are many different Jumbo Products we have access to that will take you over and above HECM and Housekeeper limts. These products have been designed specifically for seniors with substantial home equity or higher-valued homes. This product is offered through private banks and private investers. Jumbo Products have virtually no limit on home value or the amount of the loan. As a result, the amount of money available to the homeowner may be substantially greater with Jumbo Products than with other options. There are many different options to choose from for this product, infact to many to explain because everyone has a different situation and circumstance so please call in to speak to one of our Jumbo Product Advisers to receive a Free Consultation. Please Note* Jumbo Products are also available for seniors with Co-Ops. (NY ONLY)
- Q. Since federally-insured HECM loans are regulated by the U.S. government, are all HECM loans the same?
- A. Yes and no. All HECM lenders must follow HUD rules and many of the loan costs, including the interest rates, will be the same no matter which reverse mortgage lender you choose.
- Q. What are the eligibility requirements for a HECM loan?
- A. You, and any other current owners of your home, must be aged 62 or older. The home must be your primary residence. It may be either a single-family residence in a 1- to 4-unit dwelling, a condominium, or part of a planned unit development (PUD). Though some manufactured housing is eligible, most cooperatives and most mobile homes are not. The home must be at least one year old and meet HUD's minimum property standards*. Finally, you must agree to discuss the program with a counselor from a HUD-approved counseling agency.
- Q. Does the location of our home also affect the size of a HECM loan?
- A. Yes. The size of a HECM loan depends on the maximum lending limit, which varies by county and is adjusted annually. For 2006, the FHA loan limit varies from a low of $200,160 (for rural areas) to a high of $362,790 (for high-cost metropolitan areas). Go to HUD's web site to see the lending limit for your particular area.
- Q. Are there any advantages by taking my HECM loan as a line of credit?
- A. Yes. That's because a HECM line of credit continues to grow over time, increasing the amount of cash available to you until you withdraw all of it. That is possible because the remaining balance in your line of credit grows by the same total rate that is charged on your loan balance.
- Q. How are the interest rates computed for a HECM reverse mortgage?
- A. The HECM rates are based on the variable T-Bill (U.S. Treasury bills) interest rate plus margin. It is adjusted either monthly or annually.
- Q. Are HECM loans available throughout the U.S.?
- A. HECM loans are available in all 50 states, including the District of Columbia.
- Q. What types of homes are eligible for a Fannie Mae Home Keeper® reverse mortgage?
- A. Home types eligible for Home Keeper reverse mortgages include single-family homes, condominiums, and units in qualified planned unit developments.
- Q. How do Home Keeper reverse mortgage loan limits compare to those of HECM loans?
- A. Home Keeper reverse mortgages can be larger than HECMs because Fannie Mae's maximum lending limit – $417,000 for 2006 – is larger than the highest locally applied FHA mortgage limit.
- Q. In what ways may I receive money from a Home Keeper reverse mortgage?
- A. You may choose to receive money from a Home Keeper reverse mortgage in the same way you may receive funds from a HECM loan: as fixed monthly payments for life (i.e., for as long as the borrower occupies the home as his/her principal residence; as a line of credit with no growth; or a combination of monthly payments and line of credit).
- Q. How are the interest rates computed for a Home Keeper reverse mortgage?
- A. The HECM rates are based on the variable CD (Certificate of Deposit) interest rate plus margin and is adjusted monthly.
- Q. What are Proprietary Jumbo Products?
- A. These programs are offered through a private banks and investors. They are usually for homeowners looking for loan amounts over and above the HECM and Home Keeper loan Limits. The Jumbo Products offer several options to provide seniors with a broad range of choices to access their home equity. While somewhat similar to home equity loans offered by forward mortgage banks, the Jumbo products require no income qualification. The loan amount is a function of the home value and the borrower's age. The loan does not mature until the borrower sells or permanently moves out of the home (does not live in the home more than twelve consecutive months).
- Q. What are the benefits of Proprietary Jumbo Products?
- A. Jumbo Products provide the borrower with a higher available loan amount, there are virtually no loan limits for this product.
- Q. What is the Credit Line Option?
- A. The Jumbo Products Credit Line Option reverse mortgage offers borrowers an open-ended revolving line of credit. The unused line of credit usually grows by 5% per year. The origination fee on these reverse mortgages is 2% or $2,500, whichever is greater, of the Initial Advance Limit (the maximum amount that is available to you on this loan).
- The minimum amount of any draw after closing is $500. The unused line of credit grows by 5% per year. *These options vary depending on Jumbo Product chosen.
- Q. What kind of homes are eligible for the Jumbo Product reverse mortgages?
- A. The following home types are eligible for Jumbo Cash Account Plan reverse mortgage:
- Single-family detached homes
- Manufactured homes (must be built after June 1976)
- Condominiums
- Planned Unit Developments (PUDs)
- 1 to 4 rental unit (one must be owner occupied)
- Co-ops (New York State only)
Reverse Mortgage - "The Federal Housing Administration (FHA) sets limits on how much an HECM "reverse mortgage" lender may lend you—based on your age"
Frequently Asked Questions (FAQs) about HECM reverse mortgages.
Frequently Asked Questions (FAQs) about reverse mortgages in general.
The current (2006) lending limit with a Home Keeper® reverse mortgage is $417,000.
Frequently Asked Questions (FAQs) about Fannie Mae Home Keeper® reverse mortgages.
Frequently Asked Questions (FAQs) about reverse mortgages in general.
Frequently Asked Questions (FAQs) about our Proprietary Jumbo Products.
Frequently Asked Questions (FAQs) about reverse mortgages in general.
Home Equity Conversion Mortgage (HECM) Frequently Asked Questions
* Note: If the house is not up to HUD's standards, you may use the HECM loan to pay for repairs that may be required to bring it up to their standards.
Consider this example. Say you have a HECM line of credit of $150,000 and you withdraw $25,000. The remaining line of credit would be $125,000. If your next withdrawal is a year later you would have more than $125,000 available to you. Here's how it works to your advantage: if the total loan rate is, for instance, 6%, your available credit line would be 6% higher than it was a year earlier. Instead of having $125,000 available you would have $132,500 in your line of credit (6% of $125,000 = $7,500). In this example, you would have an extra $7,500 available to you in year two of your reverse mortgage. A nice added bonus.
Fannie Mae Home Keeper® Reverse Mortgage: Frequently Asked Questions
Proprietary Jumbo Products Available: Frequently Asked Questions
800-987-7740
