Michael Manfredi

JB Nutter issues a two week moratorium on new file submissions and 1st reverse issues the following statement:

"At present there is very little investor interest in product and actually a lack of secondary availability. Fannie Mae remains the principal ultimate investor and continues to address a number of internal issues which will affect their ability to provide a level of confidence in the marketplace as well."

This is good news. The government has made a step toward making homeownership for seniors more attainable. On January 1,2009, it will be possible to purchase a home with an FHA insured Reverse Mortgage. The benefits will be many and are outlined as follows:

- No qualifying, no credit, no income required

- Age 62+ borrower and principle residence occupancy required, 1-4 family homes

- No mortgage payments, for life

- Non recourse loan

- FHA insured up to $417,000

- Lowest mortgage interest rate currently available

- The loan pays for borrowers closing costs

- Approximately 50% + loan to value

There are many scenarios that make sense for the 62 and over home buyer in this program. Take, for instance, the home buyer who has an existing home sold for $400,000 and is receiving net proceeds of $200,000. The home buyer might want to downsize to a $200,000 home purchase. Instead of using up all of the proceeds to purchase the new home, a Reverse Mortgage could be used for half of the purchase price and the extra $100,000 can be retained in savings. In the same scenario, the homebuyer could use all of the proceeds and buy at $400,000 with a Reverse Mortgage providing 50% of the purchase money and have twice the buying power with no mortgage payment.

Any questions? Give me a call 480-306-4432.