What is an HECM Reverse Mortgage?
Reverse mortgages are increasing in popularity with seniors who have equity in their homes and want to supplement their income. The only reverse mortgage insured by the U.S. Federal Government is called a Home Equity Conversion Mortgage (HECM), and is only available through an FHA-approved lender.
If you are a homeowner age 62 or older and have paid off your mortgage or paid down a considerable amount, and are currently living in the home, you may participate in FHA’s HECM program.
HECM Reverse Mortgage Eligibility
The HECM is FHA’s reverse mortgage program that enables you to withdraw a portion of your home’s equity. The amount that will be available for withdrawal varies by borrower and depends on:
Age of the youngest borrower or eligible non-borrowing spouse;
Current interest rate; and
Lesser of appraised value or the HECM FHA mortgage limit or the sales price.
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