FHA Reverse Mortgage, HECM, Available for Oregon Home Purchase January 1
Purchase loans for seniors in Oregon, using the FHA Reverse Mortgage Program (HECM), will be available starting January 1, 2009. These Reverse Mortgage loans were authorized by the Housing and Economic Recovery Act of 2008 (HERA). HERA defines “HECM for Purchase” as a real estate purchase where title to the property is transferred to the HECM (Reverse Mortgage) mortgagor, which the mortgagor will occupy as a principal residence, and, at the time of closing, the HECM (Reverse Mortgage) first and second liens will be the only liens against the property.“ 
Buyers must also occupy the property in the first 60 days and the FHA case number cannot be assigned prior to Jan. 1. The Reverse Mortgage is only available on completed homes, so construction loans are not available, however, you can use the program to pay off a land sales contract. The property must be held in fee simple or on a leasehold of not lest than 99 years. The exception to this (which I find humorous) is that the leasehold can be a shorter term if it is an existing lease that will last for at least 50 years after the youngest buyers 100th birthday.
No co-ops, boarding houses, bed and breakfasts, manufactured homes prior to June 15, 1976 or after that date that don’t meet HUD standards. Property flipping is also prohibited and my required more documentation.
As per normal with Reverse Mortgages, the loan to value is fairly low. There are examples, but every borrower is different so it is best to get estimated quotes for the individual. Calculations will be based on the age of the youngest applicant. No bridge loans are acceptable for this program. Funds for closing must be verified and come from allowable FHA funding sources.
Authored by Fred Chamberlin, A Eugene/Springfield Oregon Mortgage Consultant – 541-342-7576
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