A HECM–a Home Equity Conversion Mortgage–is a type of FHA financing… it’s a mortgage! It’s like any other mortgage, except payments are optional. Yes, monthly payments with a HECM are optional. A HECM can be used to purchase a home for a retiree or refinance a home for a retiree. So, what the heck is a HECM? It’s a mortgage like any other mortgage, with optional payments.
Yes. The FHA HECM, in particular, is the safest loan in America. Absolutely, yes, the FHA HECM is completely safe. Why? Because the client owns the house; it’s a non-recourse loan, so if the house were to go down in value–if things get topsy-turvy–FHA’s got your back. It’s a mortgage like any other mortgage, it’s insured by the federal government, and it’s the safest loan in America.
With the FHA HECM type of reverse mortgage, who owns the house? The client does. The FHA HECM type of reverse mortgage is just a mortgage like any other mortgage: the client remains on title and owns the house. They must pay property taxes, homeowner’s insurance, maintain the house–but the answer is your client owns the house with an FHA HECM reverse mortgage.