FHA & HECM Reverse Mortgages
FHA - Answers-Federal Housing Administration
FHA Maximum Debt to Income - Answers-31% / 43%
FHA minimum down payment - Answers-Minimum Down Payment is 3.5%
FHA minimum FICO Score - Answers-580 with 3.5% down or 500-579 with the borrower puts 10% down
Are Gift funds allowed with FHA? - Answers-Yes
FHA Borrowers with Bankruptcy - Answers-2 years after Ch 7 discharged,
1 year after CH 13 discharged
FHA Borrowers with Foreclosure - Answers-3 years out from foreclosure or short sale
FHA seller concession - Answers-6% maximum allowed
Are FHA loan assumable? - Answers-Yes with FHA creditworthness check
,FHA Owner Occupancy rules - Answers-Owner Occupied Only. Must move in 50 days after
Who insures FHA? - Answers-Department of HUD and Urban Development
4 C's of FHA Underwriting - Answers-1. Credit History
2. Capacity to Repay
3. Cash Capital Assets available to close the mortgage
4. Collateral which evaluates the value of the home
FHA checks student loans through the "Credit Alert Verification Reporting System" CAIVRS - Answers-to
determine whether a borrower has ever failed to repay their federal debts or obligations.
FHA Gift Funds - Answers-can be either from a relative or an employer and a gift letter must be signed
FHA Upfront Mortgage Insurance Premiums - Answers-The current "UFMIP" Up Front MIP is 1.75%
FHA has a maximum loan amount. FHA is required by the National Housing Act as amended by the
Housing and Economic Recovery Act to set single family forward loan @ - Answers-115% of median
house prices subject to a floor and a ceiling on the limits
FHA streamlines - Answers-are utilized by borrowers with current FHA mortgages when they would like
to reduce their mortgage insurance, interest rate and payment
FHA Reverse Mortgages are called what? - Answers-HECM's Home Equity Conversion Mortgage .
, HECM Mortgage Basics - Answers-1. Borrower must be 62
2. Have a principal residence that is paid off or
3. Have a low mortgage balance that can be paid off at settlement with the proceeds from the reverse
loan
4. Mandatory counseling is required to apply
5. Negative Amortization
6. No escrows for taxes and insurance
If an HECM borrower dies there are a few options - Answers-1. The borrower's estate / heirs may sell the
home to pay off the reverse mortgage
2. The borrower's estate of the estate may keep the property once the reverse mortgage is paid
3. The borrower's estate / heirs may surrender the property to the lender of the reverse mortgage.
How long does and estate of HECM borrower have to decide what to do with the property? - Answers-1
year
What properties are eligible for a FHA HECM Reverse Mortgage? - Answers-1. Single Family Home
2. 2 to 4 unit home with on unit occupied by the borrower
FHA - Answers-Federal Housing Administration
FHA Maximum Debt to Income - Answers-31% / 43%
FHA minimum down payment - Answers-Minimum Down Payment is 3.5%
FHA minimum FICO Score - Answers-580 with 3.5% down or 500-579 with the borrower puts 10% down
Are Gift funds allowed with FHA? - Answers-Yes
FHA Borrowers with Bankruptcy - Answers-2 years after Ch 7 discharged,
1 year after CH 13 discharged
FHA Borrowers with Foreclosure - Answers-3 years out from foreclosure or short sale
FHA seller concession - Answers-6% maximum allowed
Are FHA loan assumable? - Answers-Yes with FHA creditworthness check
,FHA Owner Occupancy rules - Answers-Owner Occupied Only. Must move in 50 days after
Who insures FHA? - Answers-Department of HUD and Urban Development
4 C's of FHA Underwriting - Answers-1. Credit History
2. Capacity to Repay
3. Cash Capital Assets available to close the mortgage
4. Collateral which evaluates the value of the home
FHA checks student loans through the "Credit Alert Verification Reporting System" CAIVRS - Answers-to
determine whether a borrower has ever failed to repay their federal debts or obligations.
FHA Gift Funds - Answers-can be either from a relative or an employer and a gift letter must be signed
FHA Upfront Mortgage Insurance Premiums - Answers-The current "UFMIP" Up Front MIP is 1.75%
FHA has a maximum loan amount. FHA is required by the National Housing Act as amended by the
Housing and Economic Recovery Act to set single family forward loan @ - Answers-115% of median
house prices subject to a floor and a ceiling on the limits
FHA streamlines - Answers-are utilized by borrowers with current FHA mortgages when they would like
to reduce their mortgage insurance, interest rate and payment
FHA Reverse Mortgages are called what? - Answers-HECM's Home Equity Conversion Mortgage .
, HECM Mortgage Basics - Answers-1. Borrower must be 62
2. Have a principal residence that is paid off or
3. Have a low mortgage balance that can be paid off at settlement with the proceeds from the reverse
loan
4. Mandatory counseling is required to apply
5. Negative Amortization
6. No escrows for taxes and insurance
If an HECM borrower dies there are a few options - Answers-1. The borrower's estate / heirs may sell the
home to pay off the reverse mortgage
2. The borrower's estate of the estate may keep the property once the reverse mortgage is paid
3. The borrower's estate / heirs may surrender the property to the lender of the reverse mortgage.
How long does and estate of HECM borrower have to decide what to do with the property? - Answers-1
year
What properties are eligible for a FHA HECM Reverse Mortgage? - Answers-1. Single Family Home
2. 2 to 4 unit home with on unit occupied by the borrower
