Home equity conversion mortgage (HECM)

Question 1

What kind of mortgage is a home equity conversion mortgage (HECM)?

Answer 1

a reverse mortgage loan

A reverse mortgage allows homeowners to convert part of their home equity into cash.

Question 2

Who is an HECM designed for?

Answer 2

Designed for homeowners age 62 or older

This age requirement ensures that the mortgage is targeted at senior citizens who may need financial support.

Question 3

What does an HECM provide?

Answer 3

monthly income in exchange for acquired equity

This income can help seniors cover living expenses or healthcare costs.

Question 4

How is an HECM typically repaid?

Answer 4

by selling the home

Alternatively, heirs can pay off the outstanding loan balance to retain the property.

Question 5

The HECM is the only reverse mortgage that is ____ by the federal government.

Answer 5

insured by

This insurance protects both the borrower and the lender.

Question 6

The HECM is available through ____-approved lenders.

Answer 6

FHA-approved lenders

FHA stands for the Federal Housing Administration, which regulates the HECM program.