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have built up in their homes by obtaining reverse mortgages if Congress passes
legislation to modernize HUD's Federal Housing Administration (FHA), according
to a U.S. Department of Housing and Urban Development estimate released today.
HUD Secretary Alphonso Jackson is urging Congress to quickly enact The
Expanding American Homeownership Act of 2007, which could help more seniors
access reverse mortgages and build nest eggs for health care needs, home repairs
and other emergencies. "If you love your home, and want to stay in it for years
to come, then a reverse mortgage is your best and safest bet for retirement
security. Reverse mortgages offer seniors the financial freedom they deserve,
and this legislation could help two million more older Americans turn their
homes into retirement nest eggs," said Jackson.
Many older Americans who have lived in their current homes for several years
or decades have seen the value of their homes rise dramatically, especially in
recentyears. However, in high cost areas, such as the Northeast and West, home
values have surpassed the Congressionally-mandated cap of $362,790 for obtaining
anFHA-backed reverse mortgage - leaving millions of seniors without access to
the financial security this critical program offers.
The Expanding American Homeownership Act of 2007 would make reverse mortgages
available to an additional two million seniors by raising the FHA's HomeEquity
Conversation Mortgage (HECM) loan limit equal to the Fannie Mae/FreddieMac
conforming loan limit. By increasing and simplifying the loan amount, this
change would help those seniors who have homes valued above the current FHAloan
limit of $362,790 but less than $600,000, obtain a reverse mortgage through FHA.
Eligible seniors would still have to be 62 years of age or older and have
paidoff their mortgages or have only a small mortgage balance remaining. The
loanamount depends on the value of the home, the age of the homeowner and the
expected interest rates. The reverse mortgage does not have to be repaid until
theborrower moves out of the home permanently.
Last month, HUD announced that more than 308,000 seniors have used the
federally-insured HECM loan program since 1990 to convert the equity in their
home into cash without having to move. The volume of new reverse mortgages
insured by the FHA's HECM program has increased 10-fold over the past six years.
In addition to providing greater access to reverse mortgages, The Expanding
American Homeownership Act of 2007 would address growing concerns about
increasing home foreclosures and high-risk mortgages. The legislation would
protect and preserve the American Dream of homeownership by modernizing the FHA
and giving homebuyers access to a safe, fair and affordable alternative to
exotic subprime loans.
The legislation is currently pending before the U.S. Houseof Representatives.
To learn more about the FHA's HECM program, visit:
www.hud.gov/buying/reverse.cfm ### HUD is the nation's housing agency committed
to increasing homeownership, particularly among minorities; creating affordable
housing opportunities for lowincomeAmericans; and supporting the homeless,
elderly, people with disabilitiesand people living with AIDS.
The Department also promotes economic andcommunity development, and
enforces the nation's fair housing laws. More information about HUD and its
programs is available on the Internet at www.hud.gov and espanol.hud.gov. For
more information about FHA products, please visit www.fha.gov.