The HUD reverse mortgage loans are gaining prominence in the United States of America with every passing year. The HUD or the Housing and Urban Development is responsible for looking into matters related to reverse mortgage.
Utilization of HUD reverse mortgage proceeds:
The proceeds of the HUD reverse mortgage may be used for a number of purposes. It may be used for meeting medical expenses of the senior individuals who have retired. Other uses may include structural improvement of the house, paying different charges pertaining to the house like property tax.
Eligibility criteria for availing HUD reverse mortgage loans:
The FHA or Federal Housing Administration of housing and urban development makes it obligatory that the intending reverse mortgage borrower should fulfill certain conditions. These conditions have been given hereunder.
The borrower should be 62 years of age and consequently retired.
Must be the owner of a house
Should be living in the house for a minimum of half a year.
Should be having a mortgage balance, which is low.
Should be capable of repayment at the closing of the reverse mortgage loan.
The borrower is also required to avail counseling sessions from a counselor who has been approved by the HUD or Housing and Urban Development.
Homes eligible for being mortgaged under the HUD reverse mortgage program:
The home against, which the reverse mortgage loan will be availed is required to be a “single dwelling” unit. It may have a maximum of 4 units. Condominiums, which are approved by the FHA, are also eligible. The other categories include detached houses, townhouses and manufactured homes.
Methods by which reverse mortgage payments may be received:
The proceeds of the reverse mortgage may be availed by the borrowers in any of the following methods. They are:
Term- payments made on a monthly basis.
Tenure- payments made on a monthly basis till the time a co borrower is alive. Should also be occupying the house as a primary residence.
Line of credit
Modified Term
Modified Tenure.
Even though HUD reverse mortgage may prove to be helpful for retired senior citizens, nevertheless, one should be well informed about the terms and conditions of the deal. The reason being there are plenty of fraudulent lenders doing business in the reverse mortgage market. For such reasons, counseling has been obligatory and should not be treated facultative.