Reverse Mortgages

Beach Stonehenge at Montana de Oro

My dad was able to live independently for the last two years of his life because of a reverse mortgage.  He received a "credit line" based on the value of his home and used that to pay his expenses.  When he died, the loan was greater than the value of the house because of the decline in home values so I cleaned the house, distributed his few possessions, locked the door and walked away.

The concept of conversion brings up the possibility for all of us ... one that does not exist right now.  If I died today, my heirs would have to pay the almost $1,000 a month in space rent until they found a buyer.

One of the residents in this morning's informational meeting asked about reverse mortgages on mobile homes so I went to google and found the response below on a site with a notice that says they are no longer doing reverse mortgages.

Opinion:  this may change over time but might be a possibility.  More research would be required.

03/2012:  Update to Reverse Mortgage manufactured Home Requirements

HUD has very specific guidelines for Manufactured homes and there are very few lenders who will still do them, but they can be done.

 HUD/FHA requirements / guidelines:

1. Minimum Square Footage of 400 Square Feet* (current lender requirements are greater)
2. The Property must be constructed after June 15, 1976 and meet HUD guidelines as certified by HUD Label 24 CFR 3280.11.
3. Must be classified and taxed as real estate (must have turned in DMV registrations in favor of real property).
4. Was built on and remains on a permanent chassis.
5. Was designed to be used with a dwelling with a permanent foundation built to FHA criteria.
6. Finished grade elevation beneath the home or if a basement is used, the basement floor, must be at or above the 100-year frequency flood elevation (however, lenders will no longer accept a manufactured home in a flood hazard area).
7. Must be situated on a permanent foundation
8. Requires an engineer’s certification on the foundation
9. borrowers must own the land

Additional Lender requirements / guidelines:

1. The comparable sales for the appraisal must be available within 1 mile in urban and suburban areas and 20 miles in rural areas.
2. The sales cannot require excessive adjustments or the property will not be acceptable.
3. All Sections of the Home must have HUD tags accessible to the appraiser.
4. The appraiser must indicate that the seal of the home has not been compromised and any structural modifications or additions pose no issues.
5. All credit reports must be verified as having no personal liens pertaining to the dwelling.
6. No single wide units.
7. No units located in a manufactured condominium complex.
8. Units must be on their original site.  Homes moved from other previously installed sites are ineligible.