WHAT THE HECK IS A “HECM”?
Unlock Your Home’s Equity And
Open the Door to Possibilities in Retirement
When people talk about reverse mortgage loans, they’re typically referring to Home Equity Conversion Mortgages (HECMs). HECMs are insured by the Federal Housing Administration (FHA), which offers layers of protections to consumers.
The Two Types of Reverse Mortgage Loans
Key HECM Benefits for Homeowners:
Tax-Free Retirement Cash Flow*
HECMs convert a portion of a home’s equity into cash. Because the money comes from the proceeds of a loan, it’s tax free.* You can use that money for virtually any purpose you see fit.
Unique Repayment Features
HECMs do not require monthly mortgage payments. Borrowers just have to maintain their homes and pay property charges like taxes, insurance, and applicable association dues. The FHA insurance guarantees no payment is due until the last borrower moves out or passes away.
Non-Recourse HECM Advantage
Even if the housing market and home values fall after taking out a reverse mortgage loan, you or your heirs will not be responsible for paying the difference at closing—the FHA insurance will cover it.
Why Do People Get HECMs?
Dig Deeper Into How HECMs Work:
Choices to Receive Payouts:
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Line of credit
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Lump sum
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Monthly payments
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Tenure or term
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Combination of options
Eligibility Highlights
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Age 62 or older
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Home is primary residence
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Able to pay property charges
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Counseling with a HUD-approved agency
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No delinquent federal debts
Applicable Properties
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Single family
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2- to 4-unit
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Townhomes
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FHA-approved condominiums
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Manufactured and modular
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Planned unit developments
*This advertisement does not constitute tax advice. Please consult a tax advisor regarding your specific situation. The homeowner is still responsible for paying property taxes, homeowner’s insurance, applicable association dues, and for maintaining the property.