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FHA Changes Reverse Mortgage (HECM) for Purchase Deals
FHA Changes Reverse Mortgage (HECM) for Purchase Deals
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Reverse mortgages are a unique type of loan requiring an experienced MLO to navigate the process. I refer all my Reverse Mtg prospective clients to Paul Scheper, owner-broker of Longevity Mortgage.
Paul is a trusted friend and colleague of many years. Please feel free to reach out to Paul with any questions at paulscheper@live.com.
FHA Changes Reverse Mortgage (HECM) for Purchase Deals
FHA is loosening guidelines for its “Reverse Mortgage (HECM) for Purchase” – [Docket No. FR-6382-N-01], The new guidelines should go into effect in January 2024.
This permits “HECM for Purchase” borrowers to now accept (up to) 6% of the sales price from an “interested party,” such as a seller, builder, developer, real estate agent, mortgagee, third-party originator, or any other parties with interest in the transaction. The previous limit was 3% and could only have come directly from the home seller.
FHA now defines an “interested party contribution(s) ” as a payment by an interested party (or combination of parties) toward the borrower’s loan fees and other closing costs, including any items paid outside of closing, prepaid items, and discount points.
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