I’m selling a home to an acquaintance, Can they get a reverse mortgage first?
by Mortgage Rates on Tuesday, September 21st, 2010 | 4 Comments
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It doesn’t work that way. You need a good real estate lawyer to see what your options are.
This has been, up to now, very difficult to do. However, this is changing. One thing to remember is that he needs to be over a certain age to be eligible for a reverse mortgage. I do not know what you mean by “receiving equity payments on the balance”. In case the link does not work, this is an article on this subject in the NY Times from June 28, 2009.
You can only get a reverse mortgage in a home that you own and have equity in. Also, I believe you have to be retirement age.
Can he qualify? Quoting my source: “To be eligible for a FHA HECM, the FHA requires that you be a homeowner 62 years of age or older, own your home outright, or have a low mortgage balance that can be paid off at closing with proceeds from the reverse loan, and you must live in the home. You are further required to receive consumer information from an approved HECM counselor prior to obtaining the loan.”
From that, I would think he can’t do that.