A Guide to FHA Reverse Mortgage Seasoning

The FHA reverse mortgage option, called the Home Equity Conversion Mortgage, allows individuals to use their home equity to pay them an income. This is similar to a home equity loan, but the homeowner does not make payments on the loan until the property is sold. The HECM program is offered to seniors who have paid off or nearly paid off, their property.

What is seasoning?

Seasoning is a term used to describe how long a person has lived in a property. A number of private lenders have seasoning requirements before they offer a reverse mortgage. This can help prevent investors from using reverse mortgages to flip homes; seasoning also exists as a check on lending institutions that may otherwise give ill-advised loans.

What is the Seasoning Requirement for the HECM?

The HECM program does not actually have a seasoning requirement. However, the other terms will preclude a person who has not lived in the home very long from applying. The homeowner must be at least 62 years old. The home must be owned outright or the homeowner must owe a balance so minimal it can be easily closed with proceeds from the reverse mortgage. You also must live in the home to qualify.

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