HUD has really improved the HECM product in one fell swoop with a 2-in-1 bonus play! For those who want the official story you can read Mortgagee Letter 14-12 on the link below.
The first bonus is that borrowers are now allowed additional tax free proceeds with the establishment of new Principal Limits. For ages 62 thru 68 the changes are nothing to sneeze at, and for older borrowers there is a very significant increase! We have played with the numbers and in some cases the proceeds can be 15% or so higher starting right now.
Bonus number two included in the letter from HUD is the long awaited change that allows spouses under the age of 62 to participate in the benefits of this tremendous tool while protecting their interest in the home. No matter their age they can now remain in the home if the “age eligible” spouse predeceases the younger spouse. This is a huge move!
Call me about these brand new developments. Factors including the two mentioned and others are coming together in a very positive way to make a HECM transaction even better than before. This is true for the HECM for Purchase too!
Here is an intro and link to the actual HUD language:
New HECM Principal Limit Factors: ML 14-12 announces new HECM Principal Limit Factors. The new factor tables have been wholly revised and now also include PLFs for use where the Borrower has a Non-Borrowing Spouse younger than 62. Read ML 14-12 for guidelines.