Urban Financial of America LLC (UFA) has introduced its HomeSafe proprietary reverse mortgage. Through HomeSafe, loan proceeds of up to $2.25 million are available, compared to traditional reverse mortgages or Home Equity Conversion Loans (HECMs), which currently have legislated maximum available loan proceeds of $469,125.
"Now homeowners with significant value in their homes have a reverse mortgage option that may afford them more loan proceeds, and potentially a greater amount of cash up front, than a HECM product. Ultimately, HomeSafe can give borrowers an opportunity to tap into more of that property value when they need it," said Steve McClellan, president of UFA.
As with traditional reverse mortgages or HECMs, HomeSafe can be used by homeowners or homebuyers age 62 and older to leverage home equity for long-term retirement planning. While borrowers can use the proceeds however they choose, HomeSafe may be well suited to extinguishing existing mortgage debt, making improvements or modifications to the home to accommodate changing needs, supplementing medical and in-home care coverage, or buying a home.
However, unlike HECMs, HomeSafe does not carry a required mortgage insurance premium, removing a significant cost. It also is more flexible than a HECM. For purchase transactions, seller concessions and lender credits are allowed. And condominiums valued at over $500,000 do not have to be FHA-approved for the owners to use this product, unlike HECMs--which can be important for homeowners living in or wanting to buy into higher-priced condo or active adult communities. Finally, the full amount of the loan value is available at closing.
"UFA has been a trusted resource for traditional HECM reverse mortgages for more than a decade," McClellan said. "With HomeSafe, now we can meet the needs of even more consumers through a compelling and competitive proprietary reverse mortgage product."