The Field-Golden Team
Prudential Douglas Elliman
New York City
A know that this weekâ€™s blog is a little late, and I hope that you will forgive me.Â This weekâ€™s topic is especially worthwhile and worth a little forgiveness. Over the past several weeks, We have been working hard with a young lady of 77.Â Because of our work with her, we learned about a way for those over 62 to finance the purchase of a new home.Â Despite my 10 years in the business and the 18 yearsâ€™ experience my partner has, we have never seen or heard of this exciting means of financing. Today, I want to share this with all of you.Â Most of us have heard of a Reverse Mortgage, and have assumed that it meant that an owner of a home with no current mortgage would arrange a reverse mortgage that would provide them funds every month for their retirement and would be paid off when the property is sold, either upon their death or when moving out of the property.Â Basically they are using the home as an annuity.
I found out last week, with the help of a customer, that a Home Equity Conversion Mortgage (HECM) can be used to finance the purchase of new home!Â The HECM is an FHA insured, low-rate, reverse mortgage. There are several requirements and restrictions, but basically you can borrow between 55 and 70% of the purchase price (depending on the age of the youngest borrower), regardless of income or credit standing. No future payments are required until the home is sold or the borrowers are no longer living there. This program was designed to allow seniors, age 62 or older, to purchase a new principal residence using loan proceeds from the reverse mortgage and obtain a reverse mortgage within a single transaction. The program was also designed to enable senior homeowners to relocate to other geographical areas to be closer to family members or downsize to homes that meet their physical needs, i.e., handrails, one level properties, ramps, wider doorways, etc.Â Now, for some of the more significant requirements and restrictions:
The youngest borrower must be age 62 or greater.
The property must be HUD/FHA approved.
Mostly for single-family homes and condominiums.Â No Co-Ops.
FHA requirements apply (source of funds, documentation, etc.)
I do not want to make this appear too simple, and not every lender will offer it, but it is possible to get and may work for you or someone that you know.Â There are many variations, and I have only described the simplest. If retirement is in your future and you are looking at a move, this is clearly worth investigating.
I will be happy to answer your questions, or to get you answers. And, of course, we have many approved properties that we can show to buyers in NY, from Montauk to Putnam County and every place in between, as well as the South Florida area.Â Just let us know how we may help.
Fred GoldenÂ can be reached at (917) 620.4907. Prudential Douglas EllimanÂ is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential company. Equal Housing Opportunity. Listings available at www.elliman.com/FSG.