What is Home Equity Conversion Mortgage Program (HECM) and how is it different from other reverse mortgage programs?


The Home Equity Conversion Mortgage Program (HECM) is a reverse mortgage loan insured by the federal government. That is, home equity conversion mortgage (HECM) loans are insured by the Federal Housing Administration (FHA), who are a part of HUD - the US Department of Housing and Urban Development.

How is the Home Equity Conversion Mortgage Program different from other reverse programs?

HECMs are perhaps the most flexible reverse mortgage loans - they can provide you with a lump sum, or tenure plan; you can use them for any purpose; they are very likely to come out cheaper than privately insured reverse mortgage loans, even though they seem expensive. The cheapest reverse mortgage programs are those offered by local and state authorities to low and average income individuals for specific purposes - they are very likely to be cheaper than HECMs.

HECM qualification requirements are pretty much the same as for proprietary reverse mortgage plans.

Where do I get a Home Equity Conversion Mortgage Plan (HECM)?

Most reverse mortgage lenders will offer proprietary reverse mortgage plans, but could also have a variety of other reverse mortgage products to offer. For example, Fannie Mae approved lenders are required to offer HECMs - Home Equity Conversion Mortgage Loans.

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