FHA Reverse Mortgage Guidelines | HUD Guidelines

Get FREE

Reverse Mortgage Help

Enjoy Financial Independence with Reverse Mortgage

The program requires all HECM mortgagors to receive counseling from an independent third party entity. For HECM refinance transactions, mortgagors can waive and opt out of the HECM counseling requirement only if all three of the following conditions are met:

1) The mortgagor has received the required HECM Anti-Churning Disclosure form;

2) The increase in the mortgagor's principal limit exceeds the total cost of the HECM refinance by an amount equal to five (5) times the cost of the transaction (Block #1 on Anti-Churning Disclosure Form); and

3) The time between the closing on the existing HECM and the application for refinancing does not exceed five years.

Reverse Mortgage Guidelines

The amount of a reverse mortgage is based on the borrower’s age, the current interest rate and also the appraised value of the home versus what the FHA conforming loan limit is for the area in which the borrower lives. The lesser figure will be the HUD reverse mortgage limit. HUD sums up the mortgage value issue by saying that “Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow.”

The counseling session is provided by a third party counselor. This is an unbiased confidential session. It is designed as a consumer protection mechanism to make sure the borrower understands the loan and gives them an opportunity to ask questions in an environment that is independent from the loan originator and the lender. I tell my borrowers that if I have done my job correctly, it should simply be a review of the loan.