Seniors will soon be able to take part in the Federal Housing Authority's "Reverse Mortgage" program, realizing the intent behind the November 1999 passage of Texas Proposition 2. The US Department of Housing and Urban Development has released revised documents that will let approved lenders start taking applications.
A reverse mortgage allows senior homeowners to borrow against the available equity in their home without the burden of payments until the borrowers no longer reside in the dwelling. The two main funding sources for the program are FHA and Fannie Mae, the privately held corporation chartered by the US government.
The Reverse Mortgage Company of Atlanta, one of the first companies in the nation to start offering the program in other states seven years ago, has been notifying Texas seniors about the program and the reason for legislation delays, according to Audra Pickens, Regional Director.
"Several factors will affect the amount of money a senior can borrow," Pickens says, "such as the age of the youngest borrower - who must be at least 62 - the value of the home as well as current interest rates." Prospective borrowers, however, do not have to credit or income qualify to be eligible and, she emphasizes, "the proceeds are treated as tax-free income so it does not affect Social Security or Medicare eligibility." Senior homeowners in Texas will be able to utilize the Reverse Mortgage program to pay off debt such as credit cards, provide maintenance on their home or utilize it for other needs.
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