Finance of America Summary

At a Glance

Finance of America provides reverse mortgages for those entering or already in retirement who need more cash flow. A reverse mortgage loan allows homeowners over a certain age (62+ for HECMs or 55+ for a HomeSafe*) to tap into a portion of their home's equity tax-free**.

Key Figures

• Loan types: Reverse Mortgage
• Loan products: Conventional, FHA, VA, and Jumbo Loans.
• Repayment terms: Repayment due at the time of maturity event (such as when the borrower no longer lives in the house)

*For certain HomeSafe products only, excluding Massachusetts, New York, and Washington, where the minimum age is 60, and North Carolina and Texas where the minimum age is 62. Further, please note that HomeSafe products are only available in certain states.

**Not tax advice. Consult a tax professional.

How it Works

Finance of America offers a wide selection of loan products for older homeowners, including HECM, HomeSafe (proprietary jumbo reverse), and Homesafe Second.

A reverse mortgage allows you to stay in your home while using its equity to help supplement your retirement income. The right to remain in your home is contingent on paying property taxes and homeowners insurance, maintaining the home, and complying with the loan terms.

There are no required monthly mortgage payments in a reverse mortgage loan. At a minimum, your eligibility is based on the age of the youngest homeowner (if you’re married) and your ability to afford the home’s insurance, taxes, and upkeep.

Who It’s Suitable For

Homeowners without a mortgage could benefit the most from reverse mortgages. Finance of America is also a good option for senior homeowners looking for a mortgage refinance or jumbo loan. Contact a loan officer to see if a reverse mortgage is right for your specific situation.

Types of Loans/Products

Finance of America offers several types of reverse mortgage loans, with different options for receiving your money depending on the product:

• Lump sum payout: You can access up to 60% of your home’s principal limit during the first year.
• Growing line of credit: You can tap some of your home’s equity as a potential emergency fund. Any unused portion grows, giving you access to more funds the longer it goes unused.
• Term: You receive fixed monthly payments for a specific term.
• Tenure: You receive fixed monthly payments for your lifetime or as long as you live in your home as your primary residence. The borrower must maintain the home as a principal residence, pay all taxes and insurance, HOA dues, maintain the home, and comply with all other loan terms. With Modified Tenure plans, the lender will set aside a specific amount for a line of credit.
• Reverse for purchase: You can downsize to a home better suited to your needs, paying as little or as much as you want toward the mortgage. However, you’ll need a sizable down payment to use this option.
• Proprietary jumbo reverse mortgage: If you own a high-value home, you can take out up to a $4 million loan.

The Application Process

To apply for a reverse mortgage, you must prove that you can afford the home’s maintenance, taxes, and insurance. You may be asked to provide the following, among other information requirements:

• W-2s, social security statements, or retirement statements to prove your monthly income
• Government-issued IDs to verify age and citizenship/residency status
• Proof you will occupy the home as your primary residence

You’ll also need to undergo reverse mortgage counseling conducted by an independent third-party counselor approved by the U.S. Department of Housing and Urban Development (HUD) and provide the certificate of completion proving you understand what a reverse mortgage is and how it affects your estate.

Repayment Terms

Reverse mortgages don’t have loan lengths. Instead, the loan is repaid once the loan reaches maturity. Loan maturity typically happens when you sell or transfer the title of your home. If you sell your home, the proceeds from the home’s sale go towards paying off the amount borrowed, plus accrued interest and fees. The loan can also become due if you permanently leave your home or fail to comply with the loan terms including failure to pay taxes and insurance.

Forward Mortgage VS. HECM

Forward mortgages and HELOC’s are generally recourse loans which means that the related lender will have recourse to the borrower and the borrower’s assets. However, a HECM is a non-recourse loan, which means your estate will never owe more than the home is worth. If the loan cannot otherwise be repaid, the lender cannot look to your other assets (or your estate’s assets) to meet the outstanding balance on your loan.

Help & Support

Finance of America’s loan officers are specialists who can walk you through questions or concerns about a reverse mortgage application. Phone support is available at (800) 841-3723, Monday through Saturday, from 9:30am to 5pm ET.

Summary

Senior homeowners looking for help planning their golden years could benefit from using Finance of America’s services. The company offers a large selection of reverse mortgage options to help seniors make the most out of retirement, with a range of payout options. Speak with a reverse mortgage professional from Finance of America to help you understand your options.

When you work with a reputable company like Finance of America, which provides resources and education every step of the way, you’ll know what to expect when you take out a reverse mortgage, including the fees, accumulated interest, and the bottom line.

FAQs

What does it mean to age in place?

Aging in place means you can stay in the home you’ve lived in all these years and likely invested a lot of your money in. You can enjoy the fruits of your labor without being forced to sell the home. You will, however, remain responsible for paying property taxes, homeowners insurance, home maintenance, and otherwise complying with the loan terms.

What are the basic rules of a reverse mortgage?

You must be at least 62 years old for an HECM. However, Finance of America has other proprietary products like HomeSafe that allow homeowners 55+* to access a portion of their home's equity. In addition, you must own your home and have paid down a considerable amount of your existing mortgage, live in the home as your primary residence, and be able to pay property taxes, insurance, and home maintenance.

*For certain HomeSafe products only, excluding Massachusetts, New York, and Washington, where the minimum age is 60, and North Carolina and Texas where the minimum age is 62.

Are there reasons not to get a reverse mortgage?

As with any financing, it's imperative to satisfy the terms of your loan. Reverse mortgages may not be ideal for those concerned about their ability to keep up with related costs of the home or who don’t plan on staying in their home long-term. If the home is willed to an heir, it is important to remember that to keep the property, the heir will need to repay the reverse mortgage loan. This product can also be viewed as negative amortizing loan. Since no monthly payments are required, accrued interest will be added to the principal balance of the loan causing the loan amount to increase over time.

Do reverse mortgages have fixed or variable interest rates?

As with any mortgage, there are options for fixed and variable interest rates.

Physical Address

8023 East 63rd Place, Suite 700 | Tulsa, OK 74133

©2024 Finance of America is a division of Finance of America Reverse LLC which is licensed nationwide | Equal Housing Opportunity | NMLS ID # 2285 (www.nmlsconsumeraccess.org) | 8023 East 63rd Place, Suite 700 | Tulsa, OK 74133 | AZ Mortgage Banker License #0921300 | Licensed by the Department of Business Financial Protection and Innovation under the California Residential Mortgage Lending Act | Georgia Residential Mortgage Licensee #23647 | Kansas Licensed Mortgage Company | Massachusetts Lender/Broker License MC2285: Finance of America Reverse LLC | Licensed by the N.J. Department of Banking and Insurance | Licensed Mortgage Banker — NYS Banking Department where Finance of America Reverse is known as FAReverse LLC in lieu of true name Finance of America Reverse LLC | Rhode Island Licensed Lender | Not all products and options are available in all states | Terms subject to change without notice | For licensing information go to: www.nmlsconsumeraccess.org

The company does not do business as Finance of America in CA, NM, NY, and OK.

For Reverse Loans. When the loan is due and payable, some or all of the equity in the property that is the subject of the reverse mortgage no longer belongs to borrowers, who may need to sell the home or otherwise repay the loan with interest from other proceeds. The lender may charge an origination fee, mortgage insurance premium, closing costs and servicing fees (added to the balance of the loan). The balance of the loan grows over time and the lender charges interest on the balance. Borrowers are responsible for paying property taxes, homeowner’s insurance, maintenance, and related taxes (which may be substantial). We do not establish an escrow account for disbursements of these payments. A set-aside account can be set up to pay taxes and insurance and may be required in some cases. Borrowers must occupy home as their primary residence and pay for ongoing maintenance; otherwise the loan becomes due and payable. The loan also becomes due and payable (and the property may be subject to a tax lien, other encumbrance, or foreclosure) when the last borrower, or eligible non-borrowing surviving spouse, dies, sells the home, permanently moves out, defaults on taxes, insurance payments, or maintenance, or does not otherwise comply with the loan terms. Interest is not tax-deductible until the loan is partially or fully repaid. The HomeSafe reverse mortgage is a proprietary product of Finance of America Reverse LLC and is not affiliated with the Home Equity Conversion Mortgage (HECM) program. Not all HomeSafe products are available in every state. Please contact us for a complete list of availability. This is a paid advertisement from Finance of America.