FHA Offers Seniors More Affordable Reverse Mortgage


A more affordable version of the Home Equity Conversion Mortgage (HECM) has been announced by the Federal Housing Administration in an effort to help struggling seniors access the equity in their homes to pay living and healthcare expenses.

The new HECM Saver has lower upfront closing costs for homeowners who want to borrow a lesser amount than what is available through the standard HECM loan. The option will become available on Oct. 4, 2010.

FHA Commissioner David H. Stevens said that the agency designed the new reverse mortgage loan product because many seniors have found the HECM fees to be too expensive. HECM Saver significantly lowers the upfront Mortgage Insurance Premium that is required for a standard HECM loan.

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