Potential Reverse Mortgage (RM) borrowers have been hurrying to qualify for a RM before the Financial Assessment (FA) takes effect March 2nd, 2015. So many have been trying to get the required FHA counseling sessions that they are currently on a backlog of a week or longer just to get an appointment. The much anticipated Financial Assessment (FA) implementation date has been extended as the FHA continues to prepare for the changes.
The FA is designed to identify those potential RM borrowers that would be in danger of not being able to pay property tax and insurance payments. FA has two tiers; first it checks one’s ability to pay tax and insurance payments based on one’s income verses expenses. The second tier is to check one’s history of making payments on time.
If a RM borrower fails either of these tiers, they will be required to set aside funds out of their RM payout to cover property tax and insurance payments for a certain period of time based on one’s age. The previous deadline was set for March 2nd 2015; HUD has announced that they will delay the deadline until April 27th 2015. Meaning all those wishing to get a RM prior to the FA rules will have to have completed FHA counseling and provided that counseling certificate to their lender in order to pull an FHA case # by the deadline. This will undoubtedly allow more credit/income challenged clients to secure their RM before the required set asides preclude them from being able to have enough equity to qualify for a RM. If you would like to check to see what you qualify for click here or call (877)567-7476.