A new FHA reverse mortgage program can help senior homeowners relocate or downsize to a new home without giving up all their savings and save them thousands of dollars in the process. They don’t even have to sell their existing home first.
The program comes at a time when many financially strapped seniors are trying to boost their monthly incomes after being hit especially hard by the economic downturn: stock portfolio values plummeted, interest on investments shrank, and costs for health care and home repairs skyrocketed. Most has a little knowledge about the FHA reverse mortgage. To learn more about the FHA reverse mortgage, here are the frequently asked questions posed by potential modular home buyers;
What is FHA reverse mortgage?
A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. The equity that you built up over years of making mortgage payments can be paid to you. However, unlike a traditional home equity loan or second mortgage, FHA reverse mortgageborrowers do not have to repay the FHA reverse mortgage until the borrowers no longer use the home as their principal residence or fail to meet the obligations of the mortgage. You can also use a FHA reverse mortgage to purchase a primary residence if you are able to use cash on hand to pay the difference between the FHA reverse mortgage proceeds and the sales price plus closing costs for the property you are purchasing.
Who can qualify for FHA reverse mortgage?
To be eligible for a FHA reverse mortgage, the FHA requires that you be a homeowner 62 years of age or older, own your home outright, or have a low mortgage balance that can be paid off at closing with proceeds from the reverse loan, have the financial resources to pay ongoing property charges including taxes and insurance, and you must live in the home.
What types of homes are eligible for the FHA reverse mortgage?
To be eligible for the FHA reverse mortgage, your home must be a single family home or a 2-4 unit home with one unit occupied by the borrower. HUD-approved condominiums and modular homes that meet FHA requirements are also eligible.
Can FHA reverse mortgage be used on 2-4 unit properties?
FHA reverse mortgage can be used to finance 1-4 unit residential properties, including condominiums, modular homes and mobile homes (provided it is on a permanent foundation), along with multifamily properties. However, FHA loans are generally only reserved for borrowers who intend to occupy their properties.
Can I get an FHA reverse mortgage on a second home?
A co-borrower with an FHA reverse mortgage may be able to get another FHA loan if going through a divorce, and a borrower who outgrows their existing home may be able to get another FHA loan on a larger home, and maintain the old FHA loan on what would become their investment property.
Does FHA Reverse Mortgage require mortgage insurance?
Yes. The FHA reverse mortgage requires the borrower to pay for mortgage insurance.
In case you still have question about modular homes, you may contact Legendary Homes Inc in Jackson, Michigan. A representative will be happy to assist you. Meanwhile you can check our modular home price sheets by signing up to our blog
Topic: FHA Reverse Mortgage
Modular Home Financing: Frequently Asked Questions about FHA Reverse Mortgage for Senior Citizens
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