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Reverse Mortgage for Home Purchase

Common FAQ's

Q: What is the down payment required?

Answer... Down payments are calculated using the HECM Purchase Calculator. Down payments will range on average from 50% (62 year old) to as low as 28% (90 year old). All Reverse can run a quick calculation for any prospective borrower in just a few minutes.

Q: What are acceptable sources for the down payment?

Answer... Funds for down payment must be satisfactorily sourced/seasoned according to HUD guidelines. 90 days seasoning is required for funds unless they have been satisfactorily sourced. Funds can come from the sale of a currently owned residence or any other traditional form of liquid asset such as checking/savings, 401K (liquidations not loans), etc. Gift funds are also permitted, but they must meet FHA guidelines for gift funds. Any transaction where a buyer intends to utilize gift funds for the entire down payment would need compensating factors for loan approval. If you have any specific questions about a particular clients source of funds please do not hesitate to contact All Reverse Mortgage.

Q: What Property types are eligible?

Answer... SFR/PUD, Condo (Condo's must be on FHA's Approved List), 2-4 units (buyer must occupy at least 1 unit). New Construction properties are also eligible, but the Certificate of Occupancy (or local equivalent) must be issued prior to the application process being started.

Q: What are the credit or income qualifications?

Answer... There are no minimum credit score requirements and very little credit guidelines. Any BK must be dismissed/discharged prior to application & any prior short sale, foreclosure or deed in lieu (conventional loans only) must be 3 years from finalization date. Any prior federal loan delinquency (FHA foreclosure, defaulted student loan, etc.) would make a borrower ineligible. Income is only required to be verified at this time when a borrower is retaining property that they already own. If a buyer is selling their current residence prior to close on the new property then income verification will not be required. Buyers are limited to owning 2 properties on this product (subject & 1 other).

Q: What happens to the home after death?

Answer... When the last surviving applicant passes away, the loan will have reached a maturity event and it will be due. Whoever is set to inherit the property will do so. They will get in contact with the servicing company of the Reverse Mortgage to notify them that the borrower has passed away and inform them of their intentions. They will be given ample time to make the necessary arrangements. If the balance on the loan exceeds the current market value of the property at that time, the estate is not responsible to pay for the difference as Reverse Mortgages are Non-Recourse loans.

Q: What are the homeowner's responsibilities?

Answer... Once a buyer closes on a new home with a Reverse Mortgage, they must move into the property within 60 days. The property is to be their primary residence. The buyer(s) are responsible to pay the homeowners insurance & property taxes (if HOA, then also HOA dues). The buyer(s) are also responsible for maintaining the condition of the property.

Q: What can seller pay for or credit to buyer(s)?

Answer... Nothing. No seller or 3rd party concessions of any kind are permitted on this product. Buyers must pay for all their own costs. Sellers are only permitted to pay for items that are their expense in a transaction. Sellers are also not permitted to include any personal property in the contract either.

Additional Resources:

.PDF Purchase Flyer ⤑

Down Payment Calculator ⤑

Helpful Checklist / FAQ's ⤑

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All Reverse Mortgage maintains an A+ exemplary rating by the Better Business Bureau and are proud members of the National Reverse Mortgage Lenders Association. As a NRMLA member we abide by a Code of Ethics & Professional Responsibility in which we pledge to serve you with integrity. Your client's best interests are our primary consideration.

• FHA Direct Lender ID #26031-0007

• NMLS - National Mortgage Licensing System Company ID # 13999 Visit NMLS Site