HUD Lenders and FHA Loan Limits: What They Mean

For most senior citizen homeowners their home’s equity is their most valuable asset and could be worth anywhere from a couple hundred thousand dollars to a million dollars. In the hands of an inexperienced mortgage lender or worse yet, a con artist on the prowl, this could spell disaster, lifetime savings gone in a flash.

South Dakota seniors with an interest in a reverse mortgage must first find a legitimate and experienced lender and one that is capable of managing their loan.

FHA Lender Limits: What They Mean to SD Borrowers

FHA limits are set county-by-county and tend to closely reflect the local home values. These figures are key factors in determining borrower qualifications for the FHA or HUD Home Equity Conversion Mortgage. Most homeowner’s local FHA limits are more than adequate for the average HECM.

Much of South Dakota is classed as “non-metro” area and of the 66 counties all are the national FHA average without deviation. This means that most homeowners will fit into a HUD HECM without problems, but homeowners with very high-value homes in the state may be forced to opt for a more flexible reverse mortgage, one with a higher limit or no limit.

HUD Lenders: Where to Find Them

The HUD HECM is by far the most popular reverse mortgage in the country, with well over 90% of all borrowers qualifying. HUD and FHA are in the business to make homeownership and all aspects of it as affordable and accessible to as many Americans as possible.

Just because HUD and the FHA administers the HECM does not make them financial lenders. These government entities work hand-in-hand to oversee the business of housing across the country and to provide as much consumer information as possible. Borrowers will however, find the HUD-approved lender list on the HUD website and they are urged to only choose a lender from the list. This ensures they get a reputable and experienced financial provider to manage their HECM.

Single Purpose Reverse Mortgages in South Dakota

South Dakota is one of 25 states that offer a program closely resembling a single purpose reverse mortgage for property tax payment. Traditional single purpose reverse mortgages leverage borrower equity for exactly these purposes, require no payments and come due when the home is transferred or the borrower dies.

  • The South Dakota Property Tax Homestead Exemption is run very much like a tax deferral and a reverse mortgage. Qualified homeowners must be 70 or older and own their home. No repayment is necessary until the home is sold or the owner dies. Monies are only used for payment of property taxes.

Types of Financial Providers for Reverse Mortgages in South Dakota

Because South Dakota is so rural reverse mortgage providers are in limited supply. Here are a few of the types of companies that originate reverse mortgages in the state.

  • Black Hills Federal Credit Union is based in Rapid City. This HUD-approved lender is experienced with the HECM, but also offers customers other types of commercial banking services as well.
  • Financial Freedom has offices nationwide and is one of the best examples of a large volume reverse mortgage dealer, and HUD-approved. FF offers borrowers three flexible reverse mortgage options: the HECM, the Fannie Mae Home Keeper and its own very popular Cash Account Advantage.
  • Journey Mortgage is regionally located and HUD-approved. Journey provides customers with a wide array of mortgage products and services as well as the federally insured reverse mortgage.