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November 28, 2008

FHA Approves Home Equity Conversion Mortgages for Purchase Transactions

Category: FHA Mortgage – admin – 10:22 am

Seniors over the age of 62 years will be able to use FHA for reverse mortgage loans in conjunction with purchasing of a new house under newly revised guidelines issued by HUD.  As of January 1, seniors that want to downsize or can relocate using the proceeds from the sale of their home and an FHA Home Equity Conversion Mortgage to purchase a new residence. “Proceeds from sale of their former home can be combined with funds from reverse mortgages on the new home, allowing the home purchase to be made without any future responsibility of monthly mortgage payments,” said Peter Bell, president of the National Reverse Mortgage Lenders Association. This new feature of the FHA loan program (HECM) also avoids the expense of taking out a regular mortgage on the new residence and then getting a home equity conversion mortgage.

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