FHA Announces Temporary HECM Waivers

The Federal Housing Administration (FHA) on Thursday issued temporary partial waivers to its Home Equity Conversion Mortgage (HECM) policies, also known as reverse mortgages.

The waivers, FHA officials said, will provide mortgagees with expanded flexibility to help senior homeowners with HECMs who continue to experience significant financial hardship due to the COVID-19 pandemic.

One waiver allows lenders to offer repayment plans to HECM borrowers with unpaid property charges or taxes, regardless of their total outstanding payments. The waiver is effective through the end of this year.

The other waiver allows lenders to seek assignment of a HECM immediately after using their own funds to pay unpaid property taxes and insurance on or after March, 1, 2020, by temporarily eliminating the three-year waiting period for such assignments. The waiver is effective through the end of the year.

FHA officials said the waivers offer relief to HECM borrowers who were unable to make timely property charge payments due to financial hardship resulting from the pandemic.