Are there different types of reverse mortgages? Yes. There are several kinds of reverse mortgage loans:
- Those insured by the Federal Housing Administration (FHA).
- Proprietary reverse mortgage loans that are not FHA-insured.
- Single-purpose reverse mortgage loans offered by state and local governments.
Most reverse mortgage loans today are Home Equity Conversion Mortgages (HECMs), insured by the Federal Housing Administration (FHA), which is a part of the U.S. Department of Housing and Urban Development (HUD). In addition to HECM loans, some lenders may offer proprietary reverse mortgage loans, which are not insured by the federal government and are typically designed for borrowers with higher home values.
Some state and local governments and non-profit organizations also offer single-purpose reverse mortgage loans. These reverse mortgage loans may be used only for the purpose specified by the lender (for example home repairs or property taxes). They may only be available in some areas and they may be only for homeowners with low to moderate income. These non-HECM reverse mortgage loans are not federally insured.
How to shop for a reverse mortgage
If you are interested in a reverse mortgage loan, you should compare loan options, fees, and interest rates from several lenders to make sure you will get the loan features you want and the lowest interest rate possible.
Source: Consumer Financial Protection Bureau
Contact your local Area Agency on Aging and 2-1-1 and they may know of additional resources on this topic.
Area Agency on Aging (AAA)
An Area Agency on Aging (AAA) is a public nonprofit agency designated by a state to address the needs and concerns of all older persons at the regional and local levels. AAAs are primarily responsible for a geographic area, also known as a planning and service area (PSA), that is either a city, a single county, or a multi-county district. AAAs coordinate and offer services that help older adults remain in their homes, if that is their preference, aided by services such as home-delivered meals, homemaker assistance, and whatever else it may take to make independent living a viable option.
Find your local AAA by visiting their website or calling 1-800-677-1116.
2-1-1 is a confidential and multilingual service connecting people to vital resources across the state. No matter where you live in Colorado, you can find information about resources in your local community. Dial 2-1-1 from your phone or visit their website.
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