The Trump Administration announced important changes to the reverse mortgage program. These changes take effect on October 2, 2017.
Approval amounts will drop by an estimated 20%. For example, the current reverse mortgage approval amount for a 65 year old borrower with a $500,000 home is $271,000. In October, the approval drops by $56,000 (20.7%) to $215,000.
The upfront fee charged by FHA, which has been criticized as being too high in the past, will actually increase for most borrowers under the new guidelines.
The last change affects the popular growth rate in the reverse mortgage line of credit, which will drop by 0.75% per year. The FHA insurance premium that is calculated on future line of credit and loan balances will drop from 1.25% to 0.50%.
HUD’s rationale behind these changes is their desire to strengthen the long-term viability of the reverse mortgage program.
We are experiencing a major increase in applications as borrower want to lock in current favorable approval amounts.
FHA case numbers requested by Wednesday, September 27th will benefit from current guidelines. However, there are specific steps to getting your FHA assigned case number.
Call us today for more information, and to learn how to obtain your FHA case number before September 27th!