HECM – Home Equity Conversion Mortgages in New Hampshire

A Home Equity Conversion Mortgage (HECM) is the only reverse mortgage that is insured by the U.S. Federal Government.

HECM stands for Home Equity Conversion Mortgage. A HECM is the FHA insured reverse mortgage that allows qualified homeowners 62 and older to access part of the value of their home. Home equity can be accessed in several ways and enables greater cash flow to the borrower. Imagine living in your home without a traditional monthly mortgage payment¹, or instead, enjoying monthly loan proceeds from the years you’ve invested in your home.

Features, Advantages, and Qualifications

Reverse mortgage borrowers retain ownership and title to their home. It’s yours just as it was before, but now you may benefit from the equity that’s been building in your home for years. In addition, HECM (Home Equity Conversion Mortgage) reverse mortgage loans give you peace of mind since your home and property are the only assets that secure the loan.

HECM Loans are insured by the Federal Housing Administration (FHA). FHA requires a Mortgage Insurance Premium (MIP) to be collected at closing and during the life of the loan. These premiums are charged to the borrower’s loan balance. The upfront Mortgage Insurance Premium (MIP) is calculated using your home’s appraised value or a maximum of $1,149,825 (the 2024 national HECM limit) and is charged at closing. The ongoing FHA insurance premiums are calculated using each month’s outstanding loan balance.

This insurance provides the following protections and peace of mind for borrowers and their children:

• The borrower(s) are not required to pay more than the home’s fair market value.
• If the loan balance exceeds the value of the home, FHA reimburses the lender for the difference when the estate sells the home.
• Payments made to the borrower by the lender are insured by FHA. If the lender is unable to continue making payments, the payments would be made by FHA.
• If the loan balance grows and exceeds the home’s present market value, the lender cannot take title. FHA ensures that borrowers can live in their home as long as basic loan obligations are met (homeowner’s insurance in force, property tax payments current, and the home is maintained in good condition).

In order to retain the home when the reverse mortgage becomes due, the heirs may choose to keep the home by paying 95% of the home’s appraised value, less customary closing costs and real estate commissions.

A reverse mortgage allows you to draw from the value in your home without having to sell it.