FHA Reverse Mortgage
A reverse mortgage is a special type of home loan that lets a Florida homeowner convert a portion of the equity in his or her home into cash. Reverse mortgages are becoming an increasingly popular way for Florida senior citizens who own their home outright or with very low mortgage balances to achieve greater financial security.
Disbursements may be used to supplement social security, meet unexpected medical expenses, make home improvements, and more. The equity built up over years of home mortgage payments can be paid to you. But unlike a traditional home equity loan or second mortgage, no repayment is required until you no longer use the home as your principal residence.
Eligibility
Florida homeowners 62 and older who have paid off their mortgages or have only small mortgage balances remaining are eligible for our FHA insured reverse mortgage. The program allows homeowners to borrow against the equity in their homes.
Homeowners can receive payments in a lump sum, on a monthly basis or, on an occasional basis as a line of credit. Homeowners whose circumstances change can restructure their payment options.
Unlike ordinary home equity loans, a HUD reverse mortgage does not require repayment as long as the borrower lives in the home. Principal, plus interest is recovered when the home is sold. The remaining value of the home goes to the homeowner or to his or her survivors.
Investment Protection
If the sales proceeds are not enough to pay the amount owed, FHA will make up the difference.
Loan Limits
The size of reverse mortgage loans are determined by the borrower's age, the interest rate, and the home's value. The older a borrower, the larger the percentage of the home's value that can be borrowed. There are no asset or income limitations on borrowers receiving HUD's reverse mortgages. There are no limits on the value of homes qualifying for a HUD reverse mortgage. However, the amount that may be borrowed is capped by the maximum FHA mortgage limit for the Florida County.
Cash Disbursements
There are five options you can choose from for receiving cash disbursements:
- Tenure - equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.
- Term - equal monthly payments for a fixed period of months selected.
- Line of Credit - unscheduled payments or in installments, at times and in amounts of borrower's choosing until the line of credit is exhausted.
- Modified Tenure - combination of line of credit with monthly payments for as long as the borrower remains in the home.
- Modified Term - combination of line of credit with monthly payments for a fixed period of months selected by the borrower.