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Reverse Mortgage Basics

The acronym HECM stands for Home Equity Conversion Mortgage. When you see the HECM designation, you know it is referring to the FHA insured Reverse Mortgage, not a proprietary product.

Any designation of "HECM" or "reverse mortage" on this and all other pages of this site alludes to the HECM Reverse Mortgage loan program.

The HECM program at a glance

  1. All borrowers must be at least 62 years of age. Non-Borrowing Spouses (NBS) (spouses less than 62 years of age) are now allowed in the HECM reverse mortgage program. The NBS will have life time tenure protection, but will not be on title or on the loan.

  2. The home must be their primary residence.

  3. 3rd party HUD approved counseling is required.

  4. No loan payments are required on principal or interest.

  5. Borrowers are responsible for paying property taxes, homeowners insurance and the maintenance of their home.

  6. HECM Financial Assessment guidelines are used for credit and income qualifying.

  7. No non-borrowers are allowed on title.

  8. The HECM can be the only lien on the property. Any current debt against property must be satisfied when the HECM loan is closed.

  9. FHA property guidelines apply.

  10. HECM loan products:

    • Fixed* or Adjustable rates
    • Refinance or Purchase

  11. Loan proceeds can be disbursed as:

    • Lump sum
    • Line of credit
    • Monthly payments
    • Any combination of above

  12. Max draw of 60% of loan funds in 1st year.

    • May exceed 60% threshold to pay mandatory obligations (current mortgage, closing costs and any other leins against the property).

    • If mandatory obligations exceed 60% of the loan amount, borrowers are allowed to draw up to an additional 10% of the loan amount at closing.

*Fixed rate HECM loans must take a full lump sum disbursement at closing, which may make some loan proceeds unavailable. No other draws are available after closing with the HECM fixed rate option.
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Home
HECM Basics
12 Facts
Borrower Qualifications
The Loan Process
Financial Assessment
Who Owns the Home?
Who Owns the Equity?
When is the Loan Due?
A Non-Recourse Loan
It's Your Money
HECM for Purchase

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First Federal
Savings Bank
NMLS 402963
1880 S Eagle Rd
Meridian, ID 83642

dcook@bankfirstfed.com
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Home | HECM Basics | 12 Facts | Borrower Qualifications | Loan Process | Financial Assessment
Who Owns the Home? | Who Owns the Equity? | When is the Loan Due? | A Non-Recourse Loan | It's Your Money
| HECM for Purchase |
Copyright© 2019 Doug Cook FDIC & Equal Housing Lender Logo
HECM borrowers are responsible for the payment of property taxes, homeowners insurance, and the maintenance of their home. Rates and fees vary by lender. All credit products subject to approval. Information presented was not created or approved by HUD/FHA.
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First Federal Savings Bank | 1880 S Eagle Rd | Meridian, ID 83642
Institution NMLS: 402963

www.MortgageFirstFed.com/dcook
www.BankFirstFed.com

First Federal Savings Bank provides HECM Reverse Mortgage lending in the states of
Idaho, Oregon, Washington, Montana, Wyoming, Utah and Nevada.
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