Guidance for Senior Homeowners
Reverse mortgages are more complex than what many resources let on. For this reason it’s imperative that borrowers secure a reputable and experienced reverse mortgage lender. But where do you find one?
Missouri senior homeowners have a number of lender options, including HUD lenders, mortgage brokers, mortgage counselors and retail banks and lenders that include reverse mortgages in their menus of products and services.
Missouri’s FHA Reverse Mortgage Loan Limits
The federally insured Home Equity Conversion Mortgage administered through HUD is the single most used reverse mortgage in the country—over 90% of borrowers have this type of reverse mortgage–so the requirements matter to most senior homeowners.
A key factor in the HECM eligibility requirements is your local FHA limit, which affects how much cash equity you may receive from your home. Again, for most average homeowners, the county FHA limit may prove adequate, for others, with home value and equity well above the county limit, the federal HECM may not be the best answer.
Counties throughout Missouri all have fairly similar FHA limits, right about the national average. The counties relative to the St. Louis metropolitan area have only slightly higher limits.
HUD Reverse Mortgage Lenders in Missouri
Since the federally insured HECM is the number one reverse mortgage it’s imperative that borrowers know how to find a lender. First, HUD and the FHA are not lenders; they are government agencies responsible for regulating the national housing business and assuring that homeownership is within reach of all Americans. Part of their responsibility is guiding you to the proper resources, including HECM lenders.
**If you are a senior homeowner residing in Missouri and you’re considering a reverse mortgage, make sure you choose a lender from the HUD-approved lender list. You may search it by your home state. HUD only includes those lenders that have done handled a HECM within the last year, which means the lender is experienced and knowledgeable with the HUD product.
A word of caution: never pay a service or “business” to provide you with a list of approved HUD lenders. This is free information and available through HUD and most mortgage counselors.
Single Purpose Reverse Mortgages
Many states and municipalities provide financial products similar to a reverse mortgage that are specifically designed to allow low-income seniors to pay property taxes and make necessary home repairs.
- The key program available to Missouri seniors is the HeRO program, or the Home Repair Program. Eligible homeowners must be title-holders on the property, have a family income below “80% of the area median,”* and continue to live in the home on a permanent basis for at least 3 years following the loan negotiation. At the end of three years all repayment on the loan is waived, making this a grant program.
General Reverse Mortgage Providers in Missouri
Many types of financial lenders offer reverse mortgages, including the HECM, the Fannie Mae Home Keeper and private, jumbo reverse mortgages. Below are just a few of the types of reverse mortgage lenders you’ll find in Missouri.
Carter Lending
This company is a local institution that specializes in financial products designed for seniors, including reverse mortgages.
Financial Freedom
Financial Freedom is a nationwide company and boasts one of the largest volumes of reverse mortgages. FF offers three of the most popular types of reverse mortgages: the federally insured Home Equity Conversion Mortgage (HECM), the Fannie Mae Home Keeper which features a slightly higher lending limit and is suitable for all condo owners, and Financial Freedom’s own proprietary reverse mortgage, Cash Account Advantage. This last one is a jumbo reverse mortgage suited to homeowners with high-value homes and high equity. Cash Account Advantage is originated by hundreds of other lenders as well.
Paramount Mortgage Company
Paramount deals in all types of home mortgages, including the specialized area of reverse mortgages. Borrowers have access to the HUD HECM, resources for free and independent HUD counseling, mortgage calculators and more.
* Missouri Housing Development Commission, Home Repair Program PowerPoint Presentation.