Government Guarantee

FHA reverse mortgages or Home Equity Conversion Mortgages (HECM) come with a variety of guarantees and protections that are a part of the FHA (Federal Housing Administration) insurance. The FHA insurance provides the following protection and peace of mind to the borrower as well as their adult children:

  • The homeowners will never owe in excess of the home’s fair market value
  • If the loan balance ever grows above the property value, FHA pays the lender the difference once the last homeowner passes away or leaves the house.
  • Installments coming from the financial institution holding the reverse mortgage are guaranteed. If the bank ever goes into default, the payments are guaranteed to be made by FHA.
  • If the mortgage loan balance grow more than the home’s appraised value, the lending company can’t take title.
  • FHA insures that you may stay in your home provided the basic loan commitments are met (insurance and property taxes, etc. are paid).