Reverse mortgages may provide senior citizens with immediate money. Such loans are usually issued through the Federal Housing Authority, or FHA, and are readily available to homeowners age 62 and up. Reverse loans allow a homeowner to have a loan out against the value of their home not insured by any other exemptions. These mortgages do not require monthly payments until the debtor is no more able to use the mortgaged house as his main residence.
Single-family homes are eligible for reverse mortgages. Multifamily homes may also qualify if they have no more than four components and the debtor is using one of those components as his main residence. A main residence is defined from the Department of Housing and Urban Development, or HUD, the federal agency that oversees the FHA, as being the place where the debtor resides for nearly all the year.
Somebody who owns a condominium or townhouse can receive a reverse mortgage, however for condos, the development has to be approved by HUD. A house in a planned unit development, known as a PUD, is also eligible. PUDs are communities constructed by developers with common places that residents share, including a park or recreational center. These home communities are legally much like townhouses, but may differ in structure and carry various degrees of owner obligation. PUDs are often single family homes or a mixture of both single and multiunit homes, while townhouses can share common walls. Normally, significant repairs to townhouses are the duty of the homeowner's association, but in a PUD, the homeowner is responsible for repairs.
Manufactured homes, where the pieces of the house were constructed in a factory and later constructed on site, are eligible for reverse mortgages so long as the residence meets FHA requirements. The house must have been built after June 1976, be attached to permanent framework, have a floor area of 400 square feet, and meet with the FHA flood and safety standards. A manufactured home should also be classified and taxed as real estate in the area where the house is situated.