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She can modify her HECM by converting her unused credit line into a tenure payment.
HECMs are complicated, and the FHA requires counseling (at a cost of $150) prior to any purchase.
To qualify for a HECM, a homeowner must be 62 years of age or older, and the house must be their primary residence.
JOHN OLMSTEAD, a housing program specialist in HUD's Office of Housing Counseling, said HUD has approved 1,472 HECM counselors, who together work in 270 agencies.
Borrowers who take out an HECM can choose to take the payment as a lump sum; a tenure payment, which acts as an income annuity and provides a payment as long as they're in the home and remain eligible; a term payment, which provides guaranteed payments over a set term; a line of credit; or a modified tenure or term payment, which carves off part of the line of credit for regular payments.
Our HECM products enable financial institutions to easily incorporate reverse mortgages into their offering.
Starting in 2013, the HECM fixed-rate option is only available to borrowers who take an upfront lump-sum loan.
If the balance on an HECM is higher than the value of the home, the FHA makes up the difference through its Mutual Mortgage Insurance fund (MMI).
Although there is no limit on the value of a qualifying home, there is a national HECM loan limit of $625,500.
Most HECM loans include an origination fee of 2% of the first $200,000 of home's value, plus 1% on the additional value, that is capped at $6,000.
Also, as amended, Section 255 of the National Housing Act no longer allows for the reduction of the upfront mortgage insurance premium (paid to the FHA in connection with HECM loans) in the event that a senior uses the total amount of the loan proceeds from an HECM to purchase qualified long term care insurance policies.
19) In 1998 the HUD Appropriations Act established HECM as a permanent program.
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