An Experienced Financial Professional is Key

As beneficial as reverse mortgages can be, the business can also be complex and confusing. One of the first steps to a successful reverse mortgage is finding an experienced and knowledgeable mortgage professional that cares about your home’s investment as if it were his or her own.

FHA Lender Limits: Key Factor in Reverse Mortgage Loans

The Federal Housing Administration (FHA) sets mortgage limits county-by-county across the nation. These limits reflect local property and home values, type of residence and other variables. Reverse mortgage lenders use the county FHA limit as a key factor when determining if the HUD Home Equity Conversion Mortgage (HECM) is a suitable product for a borrower. A borrower’s home may be valued well above the local limits, but the HECM will only be approved in accordance with the FHA limits. For some with high-end homes this may prove too limiting.

FHA limits across the state of Washington vary widely from the national average upwards as high as $300,000 above the average. Highest limits – reflecting home values – are located in Jefferson, King, Kitsap, Pierce, San Juan, and Snohomish counties.

Find a HUD Lender in Washington

HUD and the FHA work in tandem to administer a wide range of affordable programs that benefit homebuyers and homeowners. Their primary goal is to oversee the national housing industry and ensure that every American has the opportunity to own a home.

The Home Equity Conversion Mortgage is the number one reverse mortgage in the country; over 90% of all borrowers have this product. Borrowers may locate lenders in Washington through HUD’s approved lender list available on the HUD website. This list is searchable by state and includes those lenders that have experience with the HECM.

Single Purpose Reverse Mortgages Available to Low Income Seniors

Washington State Department of Revenue provides a Property Tax Deferral for the Elderly, a type of single-purpose reverse mortgage. In fact this program fits every characteristic of a single purpose. How it works:

  • Washington seniors must be 60 years of age.
  • Must prove limited income.
  • Most own their home and it must be a permanent residence. They may be allowed to live for a brief period of time in a medical facility.
  • Deferral is based on home’s equity. The state will pay property taxes up to 80% of value.
  • Annual interest is 5%.
  • Loan becomes due when home is sold or owner dies.

Applications are available from the State of Washington Taxpayer Services Division.

Types of Reverse Home Mortgage Providers Located in WA

Remember, varying types of companies may be licensed to originate reverse mortgages from the HUD HECM to other proprietary products. Retail banks, mortgage brokers, credit unions, insurance companies and specialized reverse mortgage lenders are examples of the types of companies often marketing reverse mortgages.

Here is a sample of the types of companies you’ll find in Washington.

  • Cedar River Mortgage is a regional company that serves Washington, Idaho and Oregon. The company specializes in all types of mortgage products and services, as well as reverse mortgages. This is a HUD-approved company.
  • Frontier Bank is an example of a retail bank that also provides customers with reverse mortgages. Customers may choose from three products: the HUD HECM, the Fannie May Home Keeper and the Financial Freedom Cash Account Advantage.
  • Wells Fargo is a nationally recognized retail bank. But WF also has a vibrant Home Mortgage division that specializes in forward as well as reverse mortgages. Products include the HECM and the Fannie Mae Home Keeper.