(678) 530-0511
Reverse for Purchase
HUD Reverse for Purchase Option Guide
The HUD Reverse for Purchase program in Georgia is something all seniors should become familiar with if they are currently living in a house that is not well-suited for them to stay in for the majority of the rest of their life. Whether someone is looking to move to a house loaded with amenities in an active senior community or simply looking for an easier-to-navigate one level ranch, this program can help Georgia retirees realize their retirement dreams in a very affordable fashion. This unique government-insured mortgage program is a fiscally savvy way for a retiree to downsize, upgrade, move closer to family and friends, or just get a fresh new start to their life. Moreover, it preserves valuable assets for future needs, investments and doing the things they enjoy the most.
Key Points About the Program:
· Qualifying is easy, especially if the previous home has already been sold and the funds from that transaction have been deposited into the borrowers' account. Holding a strong equity position in the previous home allows borrowers more flexibility for the new HECM purchase.
· Seniors can more than double their borrowing power for the new purchase. For example: a $90,000 investment can get them into a $200,000+ house and there are no monthly mortgage payments!
· The house value used to determine the Reverse Mortgage maximum claim amount is the lesser of the contract sales price, the final HUD appraised value, or the current maximum FHA Reverse Mortgage limit of $625,500.
· The borrowers must have HUD-approved housing counseling and receive a counseling certificate upon completion. It lasts about 40 minutes or shorter, depending on their knowledge about the program and can now be done over the phone. The address listed on the certificate should be the seniors' current address, not the address of the house being purchased.
· The house being purchased must be owner-occupied by the borrowers and must also be the principal residence. They are required to occupy the house within 60 days of closing.
· The monetary investment required is the difference between the net amount the Reverse Mortgage will provide and the lesser of the purchase price or the HUD appraised house value). Any earnest money paid will also be credited to the buyer to reduce the total amount owed at closing.
Pertinent HUD Regulations:
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Borrowers must use cash on hand or cash from the sale of assets for the required monetary investment. The sale of the previous home is the most common scenario. The source of the funds must be verified prior to closing.
- Gifted funds are allowed, however, the gift donor may not be a person or entity with an interest in the sale of the property. Repayment of the gift may not be expected or implied. Ask for a gift letter exhibit from your Reverse Mortgage representative.
- The only liens allowed against the property after closing will be the HECM lien. Borrowers may not obtain a bridge loan (also known as gap financing) or engage in any other interim financing to meet the monetary investment requirement or payment of any closing costs to complete the sales transaction.
- A Reverse for Purchase loan application may not be taken on any new construction until a Certificate of Occupancy has been issued.
- Any repairs noted by the HUD appraiser must be completed by the seller prior to closing and all unpaid obligations must be satisfied at closing.
- The use of loan discount points, interest rate buy downs, closing cost down payment assistance, builder incentives, and gifts by the seller are not allowed. This includes customary charges that are normally paid on behalf of the borrower by the seller.
- For more information call: (678) 530-0511
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