HECM - Home Equity Conversion Mortgage
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The HECM - home equity conversion mortgage - is the most popular type of reverse mortgage. HECM’s account for more than 90% of all reverse mortgages ever issued (through 2004). HECM’s are popular for several reasons: 1) they generally provide more cash and have more payment flexibility than other reverse mortgage programs; 2) they are the only reverse mortgage insured by the federal government through the Federal Housing Administration (FHA); and, 3) they generally have the lowest fees and costs among the reverse mortgage programs.
HECM loans are available in all 50 states, the Distrct of Columbia and Puerto Rico. To be eligible for a HECM:
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-you and other owners of your home must be at least 62 and live in the home as your principal residence;
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-you must go through a counseling session with a HUD-approved counselor to ensure you fully understand the HECM program;
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-your home must be in satisfactory condition to meet HUD’s minimum property standards; and,
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-your home must meet certain other requirements - e.g. it must be a single-family residence in a 1-4 unit dwelling, part of a planned unit development (PUD), or a HUD-approved condominium.
Here is a further definition from the official HUD website:
The HECM FHA insured reverse mortgage can be used by senior homeowners age 62 and older to convert the equity in their home into monthly streams of income and/or a line of credit to be repaid when they no longer occupy the home. The loan, commonly known as HECM, is funded by a lending institution such as a mortgage lender, bank, credit union or savings and loan association.
Social tagging: HUD Reverse Mortgage
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