What kind of home can I buy with a Reverse Mortgage?
That is a great question and for the answer we will need to look to the FHA Guidelines regarding suitable property. Any home that qualifies for forward (traditional) FHA loans will be acceptable for FHA Reverse Mortgage financing.
The following eligible property types must meet all FHA property standards and flood requirements:
That is a great question and for the answer we will need to look to the FHA Guidelines regarding suitable property. Any home that qualifies for forward (traditional) FHA loans will be acceptable for FHA Reverse Mortgage financing.
The following eligible property types must meet all FHA property standards and flood requirements:
Single Family Homes (1 to 4 Unit)
FHA Approved Condominiums
Manufactured Homes that meet FHA Standards (permanent foundation on owned land)
FHA Approved Condominiums
Manufactured Homes that meet FHA Standards (permanent foundation on owned land)
However not all homes in any of the categories above may qualify. You will want to work with an experienced reverse mortgage consultant who is familiar with the HECM For Purchase.
Individual lenders may also have thier own stricter guidelines called “overlays”. (Example - Some may not be willing to loan on 2 to 4 unit multiple family dwellings) Be sure to ask your RMC if the type of home you want is one they can loan on.
Some “unique” single family homes may not qualify for FHA financing. For example, geodesic dome homes may not qualify if they cannot be shown to be marketable and there are no recent comparable sales in the immediate area.
Reverse Mortgage for purchase can be a great way to buy your dream retirement home. It gives you more purchasing power than an all cash transaction with the same benefit of no required monthly mortgage payments. Of course you must always pay your property taxes, insurance and Homeowners Association dues (if any), and maintain your home. Probably exactly as you would do if you paid cash!
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