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National Mortgage Professional
Apr 06, 2009

HUD issues Mortgagee Letter to clarify HECM for Purchase program requirementsMortgagePress.comU.S. Department of Housing and Urban Development, Mortgagee Letter 2009-11, HECM, reverse mortgages On March 27, the U.S. Department of Housing and Urban Development (HUD) issued Mortgagee Letter 2009-11 to clarify and compile HUD's guidance on the Home Equity Conversion Mortgage (HECM) for Purchase program. The program permits seniors to purchase a new principal residence with HECM proceeds. The guidance reiterates that HECM mortgagors may only have one principal residence at any given time; in order to take advantage of the HECM for purchase program to obtain a new principal residence, the mortgagor must pay off their existing FHA-insured mortgage. Additionally, only properties where construction is completed are eligible for FHA insurance under the program, and a number of different property types, including cooperatives, boarding houses, and certain manufactured homes, are ineligible. The Letter also provides guidance on avoiding property flipping under the program, for appropriately managing repairs and set-asides, for determining the maximum claim amount under the program, and for ensuring only approved funding sources are used. For a copy of Mortgagee Letter 2009-11, click here. For a copy of the attachment to Mortgagee Letter 2009-11, click here. For more information, visit www.hud.gov
Published
Apr 06, 2009
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