New Rules Could Limit Reverse Mortgages

The FHA has announced aseries of steps that will make it more difficult to qualify for a reverse mortgage and limit the maximum amounts that seniors can receive. Starting in January 2014, those seeking an FHA-backed reverse mortgage must qualify under new “financial assessments” that will cover credit history, debt levels and household cash flow. The requirements are aimed at confirming that borrowers have the “capacity and willingness” to meet their obligations under the loan terms. In addition, the FHA may require them to set aside a large portion of their drawdowns to cover several years of hazard insurance and property taxes.

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