FHA Home Loans

The Federal Housing Administration is a sprawling federal agency that issues a wide range of credit products to prospective homebuyers and current homeowners alike. Older homeowners who wish to tap the equity in their homes can count on certain FHA loan vehicles for dependable, long-lasting streams of supplemental retirement income.

FHA Mortgage Basics

The FHA oversees many different programs that reduce borrowing costs for homebuyers and homeowners. Since they're insured by the federal government and protected with adequate mortgage insurance, FHA credit vehicles tend to come with lower interest rates and more attractive repayment terms. This is equally true for primary mortgages, refinancing vehicles, and reverse mortgages.

While the sheer range of FHA loans makes it difficult to generalize about them, most federally backed mortgages have a few attributes in common:

  • Low down payments for primary mortgages

  • High borrowing caps for reverse mortgages

  • Loose credit-score requirements

  • Few collateral requirements

  • A deep roster of FHA-approved lenders

  • Special loans for home repairs and other uses

FHA Home Loans for Every Situation

The FHA offers special credit programs for older homeowners who have ample equity in their primary residence. Known as FHA Home Equity Conversion Mortgage or HECM loan, this program is a federally backed reverse mortgage that allows homeowners to "exchange" the equity that they have in their homes for monthly or lump-sum cash payments.

The funds that an FHA reverse mortgage holder earns do not have to be repaid until the holder—or their spouse—vacates the property to which the loan is attached. Provided that the property's initial mortgage has been paid off, these funds can be used at the borrower's discretion.

Benefits of an FHA Reverse Mortgage

FHA reverse mortgages provide safe, reliable sources of cash for retirees who wish to supplement meager pension or Social Security incomes. They offer a number of key benefits, including:

  • Manageable eligibility requirements

  • Full control over disbursed cash

  • Flexible repayment terms with no monthly principal and interest payments

  • Low interest rates

  • Full federal backing

  • Borrowing limits of up to $650,000

To qualify for an FHA HECM loan, at least one of the mortgaged property's titleholders must be 62 or older. Borrowers must also have sufficient equity in their homes. While homeowners may have to submit to credit checks before receiving reverse mortgage payments, their loans won't be conditioned on their willingness to put up collateral except for the home itself.

Next Steps

It's easy to qualify for a FHA reverse mortgage. Borrowers need to meet a few basic requirements:

  • Aged 62 or older (at least one spouse)

  • Significant equity in a primary residence

  • Complete a HUD-approved financial counseling session, which may be done on the phone

  • A desire for financial flexibility and freedom throughout retirement

Finding Trustworthy FHA Home Lenders

For more information about FHA home loans and reverse mortgages, contact us. To speak directly with a trained representative, call 877-700-0942 at your earliest convenience.