As retirement approaches, many homeowners seek ways to supplement their income without selling their homes. The FHA-insured Home Equity Conversion Mortgage (HECM) program offers a solution by allowing seniors to convert a portion of their home equity into cash.
What Is a HECM?
A HECM is the Federal Housing Administration’s (FHA) reverse mortgage program. It enables homeowners aged 62 or older to withdraw a portion of their home’s equity for various purposes, such as home maintenance, medical expenses, or daily living costs. Unlike traditional mortgages, HECM borrowers do not make monthly mortgage payments. Instead, the loan is repaid when the borrower sells the home, moves out permanently, or passes away.
Key Features
- Eligibility: Homeowners must be at least 62 years old and occupy the property as their primary residence.
- Loan Amount: The amount available depends on the borrower’s age, current interest rates, and the lesser of the appraised home value or the FHA mortgage limit.
- Payment Options: Borrowers can choose to receive funds as a lump sum, monthly payments, a line of credit, or a combination of these options.
Responsibilities
Borrowers are responsible for paying property taxes, homeowners insurance, and maintaining the home. Failure to meet these obligations can lead to loan default.
Learn More
For detailed information, visit HUD’s official HECM page:
👉 HUD FHA Reverse Mortgage for Seniors (HECM)
American Finance Equity Group L.L.C. 