Yes, reverse mortgages can be federally insured. As more and more seniors desire to increase their retirement income by tapping into their home equity, reverse mortgages are becoming increasingly popular. However, it is important to note that only one of the reverse loans is federally insured through the U.S. Federal Government. This loan is called the Home Equity Conversion Mortgage (HECM). To obtain an HECM, you must work with an approved FHA lender who can provide you with the necessary information to qualify. Here are some important bullets to keep in mind about federally insured reverse mortgages:
The Home Equity Conversion Mortgage (HECM) is the only federally insured reverse mortgage loan.
The HECM is insured by the U.S. Federal Government through the Federal Housing Administration (FHA).
To obtain an HECM loan, you must work with an approved FHA lender who can help you through the process.
The HECM loan is only available to those who are 62 years of age or older and who have enough equity in their home to qualify.
With an HECM loan, you can receive the loan proceeds in a lump sum, monthly payments, or as a line of credit.
If you choose a monthly payment option, you will continue to receive payments for as long as you live in your home.
Overall, if you are a senior with enough equity in your home and are looking for ways to increase your retirement income, a federally insured HECM reverse mortgage may be a viable option to consider.