Published on Monday, 31 May 2010 18:39
FHA 255 Mortgage Loan
The section 255 FHA mortgage loan also known as the Home Equity Conversion (reverse) Mortgages (HECM) provides FHA insurance on reverse mortgages which can be used by senior homeowners age 62 and older.
These can be used to convert equity in their home into monthly streams of income and/or a line of credit to be repaid when they no longer occupy the home.
FHA Section 255 features:
Borrower must be age 62 years of age or older, legal owner of the property and occupy the property as primacy residence.
Mortgage amount is based on the age of the youngest borrower, current interest rate and the lesser of appraised value or the FHA insured loan limit.
There are no credit or income requirements for the FHA reverse mortgage.
There are no limits on the value of homes qualifying for a HUD reverse mortgage.
To assist the homeowner in making an informed decision on whether the FHA 251 mortgage loan meets their needs, all borrowers are required to receive consumer education and counseling by a HUD-approved HECM counselor.