HUD recently announced that it is now offering for the first time reverse mortgages for purchasing a home.
This is phenomenal news to the Florida market as the reverse mortgage program has always targeted those older than 62 years of age, but only acted as a refinance to allow homeowners with equity to stay in their homes and avoid having monthly mortgage payments.
The program now has taken the next step to allow seniors to buy with equity from the sale of an existing home or savings, combined with an amount determined by age and equity in the new home. This again provides the ability to live in the new home without a mortgage payment. You will need to check with your local specialist to review your exact situation and to determine if you are eligible.
Basically, the program allows seniors 62 years of age or older to purchase a new primary home and combine a reverse mortgage simultaneously with no monthly payments. For those without enough of a down payment, the program will allow you to combine your own proceeds with the reverse mortgage proceeds, which again are based on the formula FHA uses for the program.
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Reverse mortgages are a government-insured program provided through FHA. Eligible properties include HUD-approved condominiums, single-family homes and multi-family homes as long as one unit is owner-occupied. It also includes manufactured homes built after June 15, 1976, and planned unit developments.
The program is designed for primary homes only. No second homes or investment properties will be allowed. The program will not allow seller financing nor second mortgages. You will need to review the guidelines with a reverse mortgage expert to be sure this program works for you.
This is an exciting program for those seniors seeking to move to the Sunshine State, as well as for those here who may want to downsize. You can find more by going online to FHA at: www.hud.gov/offices/hsg/sfh/hecm/rmtopten.cfm.