In the year 2009, the Federal Housing Administration made the introduction of a new program called the Home Equity Conversion Mortgage for Purchase or HECM for Purchase. This new program would ultimately help seniors who already own a home to purchase a new one by placing a reverse mortgage within the home they already own. This new program has not been utilized very much, but that may strictly be due to the lack of knowledge of it.
In fact, from October of 2013 to June of 2014 there have been over 40 thousand reverse mortgages originated. However, only 3.3 percent were actually used in to purchase a new home.
Although this program is just catching on due to it being so new, it is recommended to seniors who are looking to purchase a new home, they should at the very minimum, look into HECM for Purchase.
HECM for Purchase is not for everyone. This program was mainly designed for those Americans who are age 62 and older, and their net worth is tied up in the home they already own. In fact, in many cases, these older Americans can use HECM for Purchase to purchase a new home without selling their old one.
Some important factors to consider before applying for an HECM for Purchase:
There are certain types of dwelling that are eligible under the HECM for Purchase:
* Single-family homes.
* Condominiums that have been approved by the US Department of Housing
* FHA approved manufactured homes.
These properties must meet all of the FHA standards as well as flood requirements:
Along with the types of properties that qualify, there are very specific requirements that must be met by the borrower in order to be approved for the HECM for Purchase:
* Being 62 years of age or older.
* Owning the property with no lean or already having a substantial quantity of equity in the home.
* The applicant must also be financially secure in order to pay the home’s property taxes, as well as any other ongoing cost that comes with the property.
* The applicant must not have any delinquent federal debt.
For more information about HECM for Purchase, contact Longbridge Financial, LLC. They are more than willing to provide you with the proper information.
