The available funds the senior receives for the purchase is determined by Borrowers age Current Interest Rates The lesser of the sales price, the appraised value of the home or the FHA Lending Limit
As we mentioned, the HECM for purchase will always require the borrower to bring a monetary investment to the table. All funds used for borrower’s investment must be documented. You will need to provide a verification of deposit, the deed of sale from their previous property and the final HUD-1 documenting the amount of funds the borrower received. Three months bank statement is also an eligible proof of funds. Examples of ineligible funds include: Gift funds Seller financing Personal loans Cash withdrawal from a credit card A bridge loan Gap financing Or subordinate liens Seller Concessions
Please note that there are several property types ineligible with a HECM for purchase, including: Co-ops Homes without a certificate of occupancy. New construction must be completed Boarding houses Bed and Breakfast properties Any manufactured homes built before June 16, 1976. Please remember that any eligible manufactured homes must meet HUD guidelines.
Health, safety and structural repairs must be completed by the Seller prior to closing. They must be included in the purchase agreement. The borrower cannot put any money into repairs before they own the home. All repairs are paid for by the seller.
The counseling requirement for a HECM for purchase will be similar to existing counseling requirements for reverse mortgages. Since the loan is a HECM, the borrower must see a HUD approved counselor. No processing is allowed before counseling is fulfilled. An official counseling cert must be signed and dated. (counseling cert must be dated after 1/1/09 when product is available) A face to face interview must be offered to the senior, whether it is for the application session or the counseling session.
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John Le Francois Direct Access Lending www.lasvegasmtg.com 702-939-3465 [email_address]
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