Using a Reverse Mortgage for Buying a Home

Today, HUD annouced the establishment of guidance for purchasing a home using an FHA HECM Reverse Mortgage. This is great news for seniors and the real estate community in general. To give you an idea of how this works:

• 
  Appraised Value/MCA* $300,000
  Sales price $300,000
  Principal Limit** $ 199,500
  Minus Loan Fees $ 15,500
  Avail. HECM proceeds $184,000
  Req. Investment $ 116,000

* Appraised Value/MCA is defined as the maximum claim amount and is used to determine the principal limit which is the lesser of the appraised value or the FHA national mortgage limit. The principal limit is the maximum amount available to the HECM mortgagor.
** Assumes the age of the youngest HECM mortgagor is 67 and a principal limit factor of .665 for a 5% expected average mortgage interest rate.

In the above example, the buyer would bring $116,000 to the closing table for the purchase of this $300,000 home and have NO mortgage payments going forward! Owner occupancy is mandatory of course and homebuyer education is required. Call me at (253) 536-5626 for more details about this program. I am developing a web page and a seminar with all the details and will blog when they are ready. GOOD SELLING!