There seems to be some confusion as what types of properties are eligible for financing with a reverse mortgage.
FHA insures the vast majority of all reverse mortgages closed by lenders in the U.S. Lenders must follower their rules if they want the safety of the FHA mortgage insurance.
A quick background of FHA, it was set up in the 30's to as a way to facilitate the financing of residential housing. In other words, it was set up to increase homeownership.
It was and currently is not interested in investor loans on a small residential scale.
As such, reverse mortgages are first and foremost owner occupied properties. I get many questions about financing second homes and investment properties. Not happening.
Now, does that mean their can be no investment activity or income from an eligible property? No, it simply means one must live in the property. one to four unity properties are acceptable if the owner lives in one.
Then there are grey area properties, in which the owner lives their, but they are have more of a commercial use. A good example is a bed and breakfast. This won't qualify.
Financing the home is one thing. Some people call with home and hundreds of acres looking for financing on all of it. This won't happen. Only house on typical acreage will be financed.
If a home sits on one hundred acres and a home on 5 acres is customary, the lender will finance the value of the home on 5 acres and nothing more. The additional acreage must be surveyed off.
Some people call them mobile homes. We'll call 'em manufactured. Mobile home really do move. Reverse mortgages work for manufactured if the home is post nineteen seventy six, 2 or 3 wide, and has an FHA approved permanent stem-wall.
Other properties eligible for FHA financing are cooperatives, condominiums, and townhouses.
If you have a property not conforming with what I just laid out other reverse mortgage financing is available, but does not fall under the FHA umbrella. These are worth time to research but be careful. - 15224
FHA insures the vast majority of all reverse mortgages closed by lenders in the U.S. Lenders must follower their rules if they want the safety of the FHA mortgage insurance.
A quick background of FHA, it was set up in the 30's to as a way to facilitate the financing of residential housing. In other words, it was set up to increase homeownership.
It was and currently is not interested in investor loans on a small residential scale.
As such, reverse mortgages are first and foremost owner occupied properties. I get many questions about financing second homes and investment properties. Not happening.
Now, does that mean their can be no investment activity or income from an eligible property? No, it simply means one must live in the property. one to four unity properties are acceptable if the owner lives in one.
Then there are grey area properties, in which the owner lives their, but they are have more of a commercial use. A good example is a bed and breakfast. This won't qualify.
Financing the home is one thing. Some people call with home and hundreds of acres looking for financing on all of it. This won't happen. Only house on typical acreage will be financed.
If a home sits on one hundred acres and a home on 5 acres is customary, the lender will finance the value of the home on 5 acres and nothing more. The additional acreage must be surveyed off.
Some people call them mobile homes. We'll call 'em manufactured. Mobile home really do move. Reverse mortgages work for manufactured if the home is post nineteen seventy six, 2 or 3 wide, and has an FHA approved permanent stem-wall.
Other properties eligible for FHA financing are cooperatives, condominiums, and townhouses.
If you have a property not conforming with what I just laid out other reverse mortgage financing is available, but does not fall under the FHA umbrella. These are worth time to research but be careful. - 15224
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Curious about the reverse mortgage in California, go here to get yourself up to speed. Or get an excellent California reverse mortgage guide by taking a trip to this website.
