The main differences between an HECM (Home Equity Conversion Mortgage) and a Home Keeper Reverse Mortgage are eligibility, amount of money provided, and payment options.
HECM and Home Keeper mortgage programs
Both of these programs are special mortgage loans that allow homeowners 62 years of age or older, to access the equity in their home. This money can be taken as a lump sum to pay off debt, make home repairs or for any other expenses. Regular monthly payments or a line of credit may also be set up to provide a supplement income. A borrower is able to combine the cash, credit line or monthly payments to fit his particular needs. The Home Keeper Program also provides cash to purchase a new home.
Eligibility
To qualify for an HECM program, the home must be a one- to four-unit or a unit within a PUD project or condominium. Leasehold properties qualify if HUD guidelines are followed. Manufactured housing, condominium units and PUDS are eligible if FHA-approved.
All the properties mentioned above quality for the Home Keeper Mortgage, but in addition, properties that are held in trust also qualify is they meet Fannie Mae guidelines.
Mortgage amount
Both programs use the home’s value, borrower’s age and the current interest rate to determine the maximum amount that can be provided. Both programs have maximum amounts, but in different ways. The Home Keeper program’s maximum is currently $417,000 and the maximum of the HECM depends on the FHA mortgage limit for that particular county. It can vary between $200,160 and $362,790.
Payment options
The HECM program is most flexible allowing five different ways for money to be received: term, modified term, tenure, modified tenure and line of credit. The Home Keeper program provides three different options: tenure, line of credit and modified tenure.
Related posts: