Which Properties are Eligible for an FHA Reverse Mortgage
There seems to be some confusion as what types of properties are eligible for financing with a reverse mortgage.
What one first must understand is that FHA insures the mortgage companies that lend money to senior home owners for reverse mortgages. With that in mind FHA makes all the rules.
FHA has always been considered the first time home buyer's mortgage. It's not really a mortgage. It's an insuring body for the mortgage and was set up in 1934 to increase home ownership.
FHA is not in the business of helping the investor as much as it is the actual resident who owns and lives in the property.
So, the first thing to understand, as a basis for understanding FHA insured reverese mortgages, is that the reverse mortgage is for owner occupied properties. Rental homes and second home do not qualify.
Now, does that mean their can be no investment activity or income from an eligible property? No, it simply means one must live in the property. one to four unity properties are acceptable if the owner lives in one.
What if the owner lives in the property and it is used as a bed and breakfast? No. FHA will not allow for any commercial purpose even if the owner lives on site.
Financing the home is one thing. Some people call with home and hundreds of acres looking for financing on all of it. This won't happen. Only house on typical acreage will be financed.
A good scenario is a house on fifty acres. It's not hard to find this in the outskirts of Dallas or Houston. If many local homes have sold on this much land, it can fly otherwise it won't. I the norm is 2 acres, 48 acres will be survey off.
Some people call them mobile homes. We'll call 'em manufactured. Mobile home really do move. Reverse mortgages work for manufactured if the home is post nineteen seventy six, 2 or 3 wide, and has an FHA approved permanent stem-wall.
Additional home types include townhomes, condos, and Co-ops.
Non-FHA insured reverse mortgages are out there with greater flexibility in terms of property types. Be careful of these. A system of checks and balances doesn't exist with these loans as it does with an FHA insured reverse mortgage.
What one first must understand is that FHA insures the mortgage companies that lend money to senior home owners for reverse mortgages. With that in mind FHA makes all the rules.
FHA has always been considered the first time home buyer's mortgage. It's not really a mortgage. It's an insuring body for the mortgage and was set up in 1934 to increase home ownership.
FHA is not in the business of helping the investor as much as it is the actual resident who owns and lives in the property.
So, the first thing to understand, as a basis for understanding FHA insured reverese mortgages, is that the reverse mortgage is for owner occupied properties. Rental homes and second home do not qualify.
Now, does that mean their can be no investment activity or income from an eligible property? No, it simply means one must live in the property. one to four unity properties are acceptable if the owner lives in one.
What if the owner lives in the property and it is used as a bed and breakfast? No. FHA will not allow for any commercial purpose even if the owner lives on site.
Financing the home is one thing. Some people call with home and hundreds of acres looking for financing on all of it. This won't happen. Only house on typical acreage will be financed.
A good scenario is a house on fifty acres. It's not hard to find this in the outskirts of Dallas or Houston. If many local homes have sold on this much land, it can fly otherwise it won't. I the norm is 2 acres, 48 acres will be survey off.
Some people call them mobile homes. We'll call 'em manufactured. Mobile home really do move. Reverse mortgages work for manufactured if the home is post nineteen seventy six, 2 or 3 wide, and has an FHA approved permanent stem-wall.
Additional home types include townhomes, condos, and Co-ops.
Non-FHA insured reverse mortgages are out there with greater flexibility in terms of property types. Be careful of these. A system of checks and balances doesn't exist with these loans as it does with an FHA insured reverse mortgage.
About the Author:
Learn insider's information, and 5 important mistakes to make regarding the California reverse mortgage. Many more answers and a good read about the California reverse mortgage is right here.
posted by Debt Consolidation Loan at
9:45 PM
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