When you apply for an FHA reverse mortgage, you are borrowing money against the equity in your home. Borrowers who sell the home repay the FHA reverse mortgage out of the proceeds of the sale. There are no payments made for as long as the borrower uses the home as their primary residence.

FREE CREDIT SCORE

Do you know what's on
your credit report?

- SEE IT NOW -

FHA Loan Articles

News, updates, and explanations to keep you informed.

FHA Reverse Mortgages: Getting Paid and Paying Back

When you apply for an FHA reverse mortgage, you are borrowing money against the equity in your home. The FHA reverse mortgage is also known as an FHA HECM loan, which stands for Home Equity Conversion Mortgage.

This kind of equity conversion loan is guaranteed by the FHA. Borrowers who sell the home repay the FHA reverse mortgage out of the proceeds of the sale. There are no payments made for as long as the borrower uses the home as their primary residence. One of the most attractive things about the FHA HECM or reverse mortgage loan is that you never take the risk of going into debt--if the sale of your home isn't enough to cover the amount of the loan plus interest, the FHA steps in to cover the rest. That covers paying back the loan, but what about the amount of the loan itself?

DO I GET THE ENTIRE AMOUNT OF MY HOME'S EQUITY?

The amount of your loan depends on the appraised value of your home and current interest rates. Age is also a factor. The minimum age for FHA reverse mortgage applicants is 62. The youngest approved borrower won't qualify for as much as an older borrower, but you may still qualify to borrow against a substantial portion of the equity in your property. The more valuable your home is, the more money you can potentially borrow.

CREDIT REQUIREMENTS

It's easy to get confused on the credit requirements for an FHA reverse mortgage. As with any loan, one factor that determines your eligibility for an FHA reverse mortgage is your credit report. It's important to note that your specific credit score is not used to approve or deny you an FHA HECM loan, but if your credit report shows outstanding delinquent debts to federal agencies, you will not be approved. You cannot be delinquent on ANY federal debt; approval is granted only to those who are current on payments such as federal income tax or other outstanding debts.

HOW DO I GET PAID?

FHA reverse mortgage borrowers have a variety of options to get their money once the loan has been approved and closed.

Tenure lets you receive equal monthly payments for the lifetime of the loan

Term provides equal monthly payments for a specific number of months

Modified Tenure is a line of credit (see below) combined with monthly payments

Modified Term is a line of credit plus monthly payments for a specific number of months

Line of Credit lets you take money in "unscheduled installments" much like a checking or credit card account

Once you choose your payment option, many lenders are willing to alter them later, but you may be charged a fee. Ask before you decide about the ability to change payment schedules or types--your lender may have specific requirements.

FHA NEWS and RELATED ARTICLES

:: What Does the FHA Reform Act Mean for New Borrowers?

:: FHA Policy Changes You Should Know About

:: Alimony, Child Support and Separate Maintenance--Does it Count as Income?

:: Can I Still Get a First Time Homebuyer's Tax Credit?

:: 2010 BAH Rate Protection

:: Help for Struggling Home Owners from FHA and Homeowner Bailout Plan

:: Up Front Mortgage Insurance Premium Changes for FHA Loans

:: What is the FHA Hardest-Hit Program?

:: Is the Obama Home Affordable Program Open to Those with VA Loans?

:: FBI Issues Scam Warning for Home Equity Conversion Loans

:: How are FHA Refunds Determined?

:: FHA Issues Sanctions Against 120 Lenders

:: FHA Reverse Mortgages: Getting Paid and Paying Back

:: FHA Updates Rules on 2009 Tax Credit and FHA Loan Down Payments

:: FHA Reverse Mortgage Terms and Fees

:: Tax Break Money and FHA Loan Downpayments

:: When Do I Have To Pay Back My FHA Reverse Mortgage?

:: What is an FHA Reverse Mortgage?

:: FHA Home Loans Growing In Spite of Housing Slump

:: What Is RESPA and How Does It Affect My FHA Loan?

:: Does the FHA Owe You a Refund?

:: FHA Home Loans and Property Taxes

:: What is an FHA Energy Efficient Mortgage?

:: The FHA and the Government Crackdown on Loan Fraud

:: What is the Second Lien Program?

:: Prepaying FHA Loans

:: FHA Loan Myths -- The Self-employed and FHA Loan Qualification

:: What is a 'Non-Purchasing Spouse?'

:: Could Down Payment Assistance Programs Make a Comeback?

:: The 2009 First-Time Homebuyer's Tax Credit

:: $8,000 Worth of Great News for First-Time FHA Loan Homebuyers

:: The Obama Mortgage After Five Years of Loan Modification

:: Understanding the Obama Mortgage Questionnaire

:: Mortgage Insurance and the Obama Mortgage

:: What Happens Once I am Approved for Loan Modification?

:: Should I Pay a Credit Counselor to Get Help With An Obama Mortgage?

:: Will the Obama Mortgage Lower My Payments?

:: What You Should Know About Obama Loan Modification

:: FHA Cash-Out Refinancing Changes as of April 2009

:: FHA Streamline Loan Defined

:: Cash Back, Closing Costs and FHA Streamline Loans

:: FHA Streamline Loan Requirements

:: How to Prepare for FHA Streamline Loans

:: FHA Secure Refinancing Cancelled

:: Should I Consider an FHA Refinance Loan?

:: FHA Refinance Questions You Should Be Ready To Answer

:: What Should I Know About the Terms for FHA Refinancing?

:: Credit Rating, Missed Payments, and FHA Refinance Loans

:: Why Should I Consider an FHA Home Purchase Loan?

:: FHA Loans and Your Rights

:: Can I Make an FHA Home Purchase for a "Fixer-Upper"?

Qualify for an FHA Loan

FHA Mortgage Rates

CALL FOR FHA RATES

(888) 630-0099

Speak to a lender now.

We will match calls to our toll free number with our network of preferred FHA lenders.

Sites and Offers of Interest

Free FHA Limits Calculator

Display current FHA loan limits for states and counties on your real estate, mortgage, or community website.

Get: FHA Limits Widget

FEATURED SITES:

Helping you make the best financial choices, build wealth, and save money during and after your military service.

-- Military Insurance
-- Military Pay
-- GI Bill Education
-- Military Finance

Offering VA loan products that meet the home financing needs of active duty military and veterans across the country.

-- VA Loan Limits
-- VA Loan Refinance
-- VA Loan Guidelines

Remember, the FHA does not make home loans. They insure the FHA loans that we can assist you in getting. FHA.com is a privately owned website that provides information about FHA guaranteed home loans, and is not associated with the federal government or HUD / FHA.

FHA LOAN TYPES:

-- FHA Refinance
-- FHA Home Loan
-- FHA Secure
-- FHA Reverse
-- FHA Loan (fixed rate)

SPECIAL FHA TOPICS:

-- FHA Down Payments
-- FHA in Your City
-- Obama Mortgage
-- HOPE Act
-- FHA Mortgage Tips
-- FHA Loan Prequalify
-- Other Loan Types
-- FHA Loan Questions

FHA Foreclosed Homes

SEARCH FOR FREE!

Search by State

- or -

Enter Zip Code

- A Military Hub Site -

Military guidelines, regulations, and benefits are introduced each year for everything from Military Pay Charts to your VA Loan benefits. We can help you stay informed.

> See also: 2009 Military