A reverse mortgage allows elderly individuals above the age of 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 giving up on ownership.
Many are unaware that the condominiums stand eligible for the 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 branch of the US Department of Housing and Urban Development (HUD).
One can get reverse mortgages for manufactured homes, condominiums, and single-family homes. However, the owners or condo must meet a certain set of requirements set by the FHA. Continue reading to find out if you are eligible for a reverse mortgage or not.
The Department of Housing & Urban Development (HUD) has approved various condos. Before you proceed and apply for the loan, you must know whether your condo is approved. To get a reverse mortgage for a condo, the whole condo complex must be approved by the HUD.
Do you want to know which condos have been approved by the HUD? You can easily check this information online. The information is present for the public, and anyone can check it out online without any issues. You can visit HUD’s official website to access the information and the list of HUD-approved condominium projects.
Within a few simple steps, you can check whether the condo is approved or not. After visiting the website, all you have to do is type your Zip Code. Just click on the Send button to proceed further.
If you can’t find your complex, likely, it has not been approved yet. So, you may not be eligible to get a reverse mortgage for a condominium in this case.
If you find that your complex is listed, then you must go ahead and check whether it is approved or rejected. There will also be a column of the expiration date. You must also check the expiration date.
If the column shows expired, then the complex will have to undergo the renewal procedure. After the renewal and approval, you will be able to get the mortgage benefits.
In case you have a site condo, there is no need for FHA’s approval in that case. A site condo is a single-family and detached condo that doesn’t share walls with another condo.
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.
The homeowner association or the management company must be willing to participate and help you get your application approved from the HUD. If the homeowner association members are not willing, you will have to collect all the documents for approval.
You can get in touch with 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 years of age 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.