Reverse Mortgages

The HECM is a Reverse Mortgage Insured by the Federal Housing Administration (FHA) for borrowers of at least 62 years of age. This government insured loan allows the borrowers to convert their home equity into cash.

 The acronym HECM stands for Home Equity Conversion Mortgage.

There are some downsides to a HECM loan. The borrower has to live in that house during the term of the loan and it should be the Borrower's Primary Residence for much of the year. The Borrower has to pay back the HECM if the house is sold or the borrower moves out of the house. If the borrower has a HECM, their Heirs will have to repay either the full loan balance or 95% of the home’s appraised value which ever is less to keep the property. Upon the death of the borrower, and the eligible non borrowing spouse, the loan becomes due and payable. 

The main advantage of HECM is eliminating traditional mortgage payments and obtaining monthly income by accessing home equity while still owning and living in the home The borrower can loose the home with a reverse mortgage if the home is not their primary residence or they move or sell your house. If someone takes out a reverse mortgage loan, the title of their home remains with them. When the elderly homeowner moves to a Medicaid funded nursing home, they are  required to sell their house. 

All HECMs are Reverse Mortgages but all Reverse Mortgages are not HECMs. HECMs are Reverse Mortgages backed by FHA and issued by an FHA lender.

Residential Loan Application for Reverse Mortgages (Fannie Mae Form 1009)


What is an FHA Reverse Mortgage Loan? 

A Reverse Mortgage loan is for seniors over the age of 62 that have enough equity in their home and want to use it. The Home Equity Conversion Mortgage, or HECM, is the only reverse mortgage that is insured by the U.S. Federal Government and is only available through an FHA approved Lender. 

I have a mortgage on my home, can I still get a Reverse Mortgage Loan? 

Yes, one of the purposes of the reverse mortgages is to eliminate your current mortgage (Owner must maintain property taxes and insurance). If your home is free and clear you may also qualify for a cash lump sum the day of funding and a line of credit available for the second year. 

What can I do with the money I receive? 

The money received can be used as you please. From going on a long vacation to paying off any debt you may have or can be used to give you the financial relief you have been pursuing. 

Am I required to pay income taxes on the money I receive? 

No, since you are converting your home equity into cash. This can be verified with your tax preparer

Can I continue to receive my Social Security, Medicare or Medicaid benefits if I get a Reverse Mortgage Loan? 

Yes, however, there are restrictions on how money can be received if you are on Medicaid. For further questions, contact Social Security Administration at 800.772.1213 

Is good credit required? 

Not necessarily. We will be checking for credit history, not score. Any derogatory account will need to be detailed in a letter of explanation alongside evidence of said financial hardship. 

Is there any income requirement? 

Yes. We will calculate residual income to assure that you can afford to pay property taxes and insurance of the home on your own. 

How do I find out if I qualify for a Reverse Mortgage Loan? 

Call us at 214-699-4790 to speak to one of our experienced Reverse Mortgage Consultants. 

When and who pays off my Reverse Mortgage Loan? 

You are not required to pay back the loan as long as you reside in the property as owner occupied and pay all property charges when due. If you sell your home, you will only be required to pay the balance on the reverse mortgage loan, keep the difference in equity. Did you know that you can purchase a new home using the reverse mortgage program? You may contact our office for more information. 

Who keeps the home when I pass away? 

The beneficiary of the property will be given a certain amount of time to either sell or refinance the property. If the heirs do not want to acquire the property they are not required to pay the debt and simply advise the lender that they will not be keeping the home. 

Is the Reverse Mortgage Program Right for me?

There are many factors to consider before deciding whether a HECM is right for you. To aid in this process, you must meet with a HECM counselor to discuss program eligibility requirements, financial implications and alternatives to obtaining a HECM and repaying the loan. Counselors will also discuss provisions for the mortgage becoming due and payable. Upon the completion of HECM counseling, you should be able to make an independent, informed decision of whether this product will meet your specific needs.

What are the Borrower and Eligibility Requirements? 

There are borrower and property eligibility requirements that must be met. You can use the listing below to see if you qualify. If you meet the eligibility criteria, you can complete a reverse mortgage application by contacting us. We will discuss other requirements of the HECM program, such as first year payment limitations, available payment options, the loan approval process, and repayment terms.

What are the Borrower Requirements  for a Reverse Mortgage?

You must:

What are the Property Requirements for a HECM?

The following eligible property types must meet all FHA property standards and flood requirements:

What are Financial Requirements for HECM?

What are the Payment Plan Options for HECM?

For adjustable interest rate mortgages, you can select one of the following payment plans:

What is the Mortgage Amount Based On for HECM?

The amount you may borrow will depend on:

If there is more than one borrower and no eligible non-borrowing spouse, the age of the youngest borrower is used to determine the amount you can borrow.

What are the costs associated with a HECM ?

You can pay for most of the costs of a HECM by financing them and having them paid from the proceeds of the loan. Financing the costs means that you do not have to pay for them out of your pocket. On the other hand, financing the costs reduces the net loan amount available to you.

The HECM loan includes several fees and charges, which includes: 

(1) mortgage insurance premiums (initial and annual) 

(2) third party charges 

(3) origination fee 

(4) interest and 

(5) servicing fees. We will discuss which fees and charges are mandatory.

You will be charged an initial mortgage insurance premium (MIP) at closing. The initial MIP will be 2%. Over the life of the loan, you will be charged an annual MIP that equals 0.5% of the outstanding mortgage balance.

Q: What is an FHA Reverse Mortgage Loan? 

A Reverse Mortgage loan is for seniors over the age of 62 that have enough equity in their home and want to use it. The Home Equity Conversion Mortgage, or HECM, is the only reverse mortgage that is insured by the U.S. Federal Government and is only available through an FHA approved Lender. 

Call us today at 214-699-4790, and we look forward to guide you with your questions and the entire Process.