2013 Reverse Mortgage Update and Considerations
Change Effective September 30, 2013
In early September, 2013, HUD announced it was eliminating the 3 remaining choices (Standard Adjustable, Fixed Saver, Adjustable Saver) and creating a new version. This new version would have roughly 15% less money for the borrower than the Standard Adjustable and abut 5% more than the two Savers. This became effective with all case numbers issued after October 28th, 2013
At the same time, HUD announced that effective January 13, 2014 they would institute guidelines requiring all borrowers to show the ability and inclination to remain current on their homeowner's insurance, property taxes and home maintenance.
Change Effective April 1, 2013
In early 2013, HUD announced it was eliminating the Standard Fixed rate choice. It was no longer available after April 1, 2013.
This was a choice that provided the most money. This was largely because investors were willing to buy this choice from lenders for a large premium over face value. The lenders were able to use a portion of this premium to waive fee for borrowers. For those with the maximum FHA home value of $625,500, this amounted to approximately $21,000 or more.