What is a HECM

What is a HECM?

A Home Equity Conversion Mortgage (HECM), commonly known as a reverse mortgage, is a Federal Housing Administration (FHA) insured loan which enables you to access a portion of your home’s equity to obtain tax-free funds without having to make monthly mortgage payments. If you are 62 years of age or older and have sufficient home equity, you may be able to get the cash you need to:

       • Pay off your existing mortgage*

       • Continue to live in your home and maintain the title

       • Pay off medical bills, vehicle loans or other debts

       • Improve your monthly cash flow

       • Fund necessary home repairs or renovations

       • Build a "safety net" for unplanned expenses

• Improves monthly cash flow by eliminating debt
• No monthly mortgage payments due*
• Loan proceeds are tax-free**
• Heirs inherit any remaining equity
• Net proceeds can be accessed in multiple ways
• Interest may be tax deductible when HECM is paid***
* Homeowners continue to pay property taxes, homeowner’s insurance, keep up home maintenance. Although there are no monthly mortgage payments, interest does accrue on the portion of the loan amount disbursed. 
** Homeowners should consult their tax advisor. 
*** IRS Website www .irs.gov/publications/p936/ar02.html

• Borrower must be at least 62+ years of age
• Homeowner must live in home as primary residence (6 mo. + 1 day)
• Must be able to pay off their existing mortgage using the HECM loan proceeds
• Property must be an eligible property type

Additional Conditions
• Borrower(s) must complete a HUD approved 3rd party counseling session
• Property must be maintained according to FHA requirements
• Borrower(s) must continue to pay property taxes and homeowners insurance
• Lending limit of $625,500
• HECM loan must be in first lien position

Borrower Protections 
• Non-recourse loan  

• 3rd party counseling 

• Lien-holder not added to title 

• Property satisfies lien

• Anti-steering regulations

• Right of rescission

(888) 603-1550

(619) 294-9820

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