By Charles Kirkendall
HUD reverse mortgages can be a great tool for Seniors that are
looking for additional funds for retirement. Through a HUD
reverse mortgage, seniors can tap into the equity from their
homes without having to make repayments.
HUD Reverse Mortgage Eligibility
Homeowners must meet the following criteria in order to be
eligible for a HUD reverse mortgage:
- Homeowner must be age 62 or older.
- The home must be owned free and clear or have a mortgage
balance that can be paid from equity.
- The home must be a principal residence.
- The property must be a single-family home, a one-to-four
dwelling with one unit occupied by the applicant, a
home (mobile home), or a unit in condominiums or Planned Unit
- The property must meet minimum property standards.
Homeowners that qualify can receive payments in a lump sum, on
a monthly basis, or on an occasional basis as a line of
At a later date the payment options can be restructured if
Guidelines on HUD Reverse Mortgage Amounts
The amount that can be borrowed on a HUD reverse mortgages is
determined by the following criteria:
- The borrower's age - The older the borrower the more that
be borrowed against the value of the home
- The loan interest rate - Obviously the lower the interest
rate the more that can be borrowed.
- The home's value - There is no hard limit for home value to
qualify for a HUD reverse mortgage, but the amount that may be
borrowed is capped by the maximum FHA mortgage limits for an
area. This means that owners of a high priced home can't
any more than the owners of homes valued at the FHA limit.
There are no asset or income limitations on borrowers
a HUD reverse mortgage.
Unlike ordinary home loans, a HUD reverse mortgage does not
require repayment as long as the home remains the borrowers
primary residence. When the home is sold the Mortgage company
recovers their principal, plus interest, and the remaining
value of the home goes to the homeowner or to his or her
survivors. Should the sales proceeds not cover the amount
HUD will pay the mortgage company for any shortfall.
The Federal Housing Administration, which is part of HUD,
collects an insurance premium from all borrowers to provide
this coverage. Typically the mortgage company pays for this
insurance and charges it to the borrower's principal balance.
This FHA reverse mortgage insurance can make HUD's reverse
mortgage program less expensive to borrowers than private
programs without FHA insurance.
About The Author: Charles Kirkendall writes about reverse
mortgages and other Senior financial issues. Visit
www.reverse.settle-today.com for more information and
resources on reverse mortgages.