A reverse mortgage allows elderly individuals above 62 to convert their home into a regular income source. It is a custom-made financial program that helps senior citizens convert their assets without relinquishing ownership.
Many are unaware that condominiums are eligible for reverse mortgage programs. You can receive a reverse mortgage condominium if it is a principal residence.
The US government insures the Home Equity Conversion Mortgage (HECM). These are done through the Federal Housing Administration (FHA), a US Department of Housing and Urban Development (HUD).
One can get reverse mortgages for manufactured homes, condominiums, and single-family homes. However, the owners of condos must meet certain requirements the FHA sets. Continue reading to find out whether you are eligible for a reverse mortgage.
How do you check if you meet the reverse mortgage condominium requirements?
The Department of Housing & Urban Development (HUD) has approved various condos. Before applying for the loan, you must know whether your condo is approved. The HUD must support the whole condo complex to get a reverse mortgage for a condo.
Do you want to know which condos have been approved by the HUD? You can easily check this information online. The data is present to the public; anyone can check it out online without issues. You can visit HUD’s official website to access the data and the list of HUD-approved condominium projects.
You can check whether the condo is approved within a few simple steps. After visiting the website, all you have to do is type your Zip Code. Just click on the Send button to proceed further.
Suppose you can’t find your complex, it is likely not approved yet. So, you may not be eligible to get a reverse mortgage for a condominium.
Checking for eligibility
If you find that your complex is listed, you must check whether it is approved or rejected. There will also be a column for the expiration date. You must also check the expiration date.
If the column shows expired, the complex must undergo the renewal procedure. After the renewal and approval, you can get the mortgage benefits.
In case you have a site condo, there is no need for FHA’s approval. A site condo is a single-family, detached condo that doesn’t share walls with another apartment.
Why may HUD decline a condo complex?
Here are some of the main reasons why HUD may decline any condo project:
- They are not contributing 10% of their annual revenues to reserves.
- HUD leasing guidelines are not followed
- Insurance issues
- Too many units have not paid their arrears.
- Not having 50% equity in the home.
- Vacation homes and rental homes are not eligible for the reverse mortgage.
Getting Reverse Mortgage Condo Approval
The homeowner association or management company must be willing to participate and help you get your HUD-approved application. If the homeowner association members are unhelpful, you must collect all the documents for approval.
You can contact a mortgage company to proceed with further steps. They will help you understand the list of documents that are necessary for the procedure. You must be at least 62 to get the reverse mortgage. The older you are, the more beneficial it will be for you. Get in touch with a mortgage company and proceed with the application.
