Here are three kinds of Reverse Mortgage:
Home Equity Conversion Mortgages (HECM)
It is administered by the U.S. Department of Housing and Urban Development (HUD). This program is often called a HUD or FHA reverse mortgage.
FHA’s reverse mortgage program collects funds from insurance premiums charged to the homeowners. An upfront insurance premium of 2% is charges based on the maximum amount that can be borrowed, with an annual premium of 0.5% that is paid on a monthly basis for the life of the loan.
Home Keeper Reverse Mortgage Loan
This program is administered by Fannie Mae and is similar in many ways to a HECM. However, the key differences are that more property types are eligible, the maximum amount that can be borrowed is higher, singles can borrow more though couples less and a line of credit does not grow, unlike a HECM.
Any broker who sells the Home Keeper program must also offer the HECM program. Both require that the borrower receive information and counseling from an independent third party.Jumbo Reverse Mortgage Loan
These are proprietary programs set up and run by private companies. The biggest attraction of these schemes is that there is no maximum amount that can be borrowed; the limit is set by the value of the home. Owners of high-value homes who want to unlock as much cash as possible would be best accommodated by a jumbo reverse mortgage. However, the cost of these is higher, so a potential borrower should fully understand the charges involved.
FHA’s reverse mortgage program collects funds from insurance premiums charged to the homeowners. An upfront insurance premium of 2% is charges based on the maximum amount that can be borrowed, with an annual premium of 0.5% that is paid on a monthly basis for the life of the loan.
Home Keeper Reverse Mortgage Loan
This program is administered by Fannie Mae and is similar in many ways to a HECM. However, the key differences are that more property types are eligible, the maximum amount that can be borrowed is higher, singles can borrow more though couples less and a line of credit does not grow, unlike a HECM.
Any broker who sells the Home Keeper program must also offer the HECM program. Both require that the borrower receive information and counseling from an independent third party.Jumbo Reverse Mortgage Loan
These are proprietary programs set up and run by private companies. The biggest attraction of these schemes is that there is no maximum amount that can be borrowed; the limit is set by the value of the home. Owners of high-value homes who want to unlock as much cash as possible would be best accommodated by a jumbo reverse mortgage. However, the cost of these is higher, so a potential borrower should fully understand the charges involved.
Reverse Mortgage Information 