Home Equity Conversion Mortgage program (HECM) will be revised with some changes and may come into effect in the month of October. Federal Housing Administration (FHA) will receive new changes from the House and the U.S. Senate that may go into effect from 1st October 2013. The setting up of new rules will help to protect the borrowers and let the agencies avoid a federal bailout.
Although, the changes are being made for helping the borrowers, it may still make it difficult for some borrowers to qualify for the same:
· Age Requirement: 62 years
· Property must be your primary home
· Property must be used for collateral
· No Delinquencies on federal debt, suspensions, debarment from FHA programs.
· HECM Counseling
The use of a reverse equity program is to allow senior citizens with good equity in their home to use it for covering living expenses. If a person qualifies for the reverse mortgage program, then he or she will start receiving money from their home equity to live a life that they have been accustomed to.
However, it is to be noted that in case you sell your home or no longer use it as primary residence, then the cash, interest and all the due amounts with HECM finance changes must be repaid. In a case where any proceeds are above the equity, it will be given to the surviving spouse or estate.
Please feel free to share your views and experience about the changes in HECM program with us in the comments. For more information about the HECM program: Click Here