Both the HECM (US Department of Housing and Urban Development) and the Home Keeper reverse mortgage (Fannie Mae) remain the two hottest programs for seniors. Both supply very similar benefits, however there are some variations and it is important try to be aware of them if you are considering either program.

Here are among the key variations between the 2 programs.

What homes are eligible?

To qualify for the HECM program your home must be either a one- to four-unit dwelling or a unit in a condominium or deliberate unit growth (PUD) project. Leasehold properties are eligible if they meet HUD guidelines. Manufactured housing and items in condominiums and PUDs may be eligible if they’re FHA-approved.

All of the mentioned properties qualify for the Home Keeper program but, in addition, properties held in belief are eligible if they conform to standard Fannie Mae pointers and an influence of lawyer is allowed if it conforms to Fannie Mae guidelines.

How much money can you get?

Both use the value of the home, current interest rate and age of borrower(s) to find out the most amount that can be borrowed. Both are capped but in different ways. With the Fannie Mae program the maximum amount that may be borrowed currently stands at $417,000 (2007). HECM maximum limit relies on the FHA mortgage limit for a given county, which varies from $200,160 to $362,790 (2007).

What are the payment options?

The HECM is the most flexible of all programs. There are five ways one can elect to obtain the money.

Tenure – equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.
Term – equal monthly payments for a set period of months.
Line of Credit – unscheduled payments, at times and amounts of the borrower’s choosing until the road of credit is exhausted.
Modified Tenure – a combination of line of credit with monthly payments for so long as the borrower remains in the home.
Modified Term – a combination of line of credit score with monthly payments for a set period of months specified by the borrower.

Note: line of credit isn’t available in Texas.

With a Home Keeper reverse mortgage, there are 3 options: Tenure, Line of Credit and Modified Tenure.

One necessary point about receiving a line of credit score is that the Fannie Mare program is a revolving line of credit, which means the borrower can withdraw a certain amount, then pay it back and withdraw it again at a later stage. Also, a HECM permits for appreciation of the road of credit; curiosity is added to what is still left within the undrawn funds, but this doesn’t happen with a Home Keeper line of credit.

Both programs enable the borrower to modify payment types without penalty though a small charge is made each time the payment possibility is changed. Currently, the HECM program prices $30 and the Home Keeper $50.

The above are the principle differences between a HECM and a Home Keeper reverse mortgage but there are others. You ought to talk to your dealer about these variations and how they might impact your financial situation. Also, remember to explore proprietary (jumbo) programs and what they might be capable to offer you.

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