You may want to investigate a Home Equity Conversion Mortgage, also known as a reverse mortgage.
The purpose of this loan is to allow older homeowners who are equity rich to convert their home’s equity into income. This loan is insured by the Federal Housing Administration and administered by the U.S. Department of Housing and Urban Development (HUD). In order to be eligible, the homeowner must be 62 years of age or older, have a very low outstanding balance on their mortgage or own their home free and clear, and have received HUD-approved reverse mortgage counseling.
Other requirements stated by HUD include:
* An eligible property must be a principal residence, but it can be a single-family residence, a one- to four-unit building with one unit occupied by the borrower, a manufactured home (mobile home), a unit in an FHA-approved condominium, or a unit in a planned unit development.
* The property must meet FHA standards, but the owner can pay for repairs using the reverse mortgage.
For more information about Home Equity Conversion Mortgages, their requirements and eligibility, visit HUD’s Web site: www.hud.gov/offices/hsg/sfh/hecm/hecm--df.cfm.
In addition, Fannie Mae has a fact sheet on Home Equity Conversion Mortgages:
www.fanniemae.com/global/pdf/homebuyers/hecmstriper.pdf.
Finally, the Financial Security for All eXtension site has additional information on reverse mortgages. Visit:
www.extension.org/pages/Financial_Security_for_All_Community_Page and type reverse mortgages in the search box.
