• • Proprietary Reverse Mortgage

  Looking for a way to get a lump sum at closing or to get more funds than a traitional Reverse Mortgage allows? A proprietary reverse mortgage is a private, non-government-insured reverse mortgage designed by individual private lenders. Like federally backed Home Equity Conversion Mortgages (HECMs), it allows older homeowners to convert home equity into tax-free cash without mandatory monthly mortgage payments as long as they live in the home.   

  Because proprietary loans are not bound by Federal Housing Administration (FHA) regulations, they offer distinct advantages and features tailored to higher-value properties or borrowers who do not meet standard HECM requirements.   

  Key Characteristics

  • Jumbo Borrowing Limits: Designed for high-value properties that exceed standard FHA limits.   

  • Lower Age Requirements: Often available to homeowners starting at age 55 (depending on state regulations and individual lender rules), whereas HECMs require borrowers to be at least 62.   

  • No FHA Mortgage Insurance: Because they lack federal backing, borrowers avoid upfront and ongoing FHA Mortgage Insurance Premiums (MIP), which can significantly reduce closing costs.   

  • Flexible Property Types: Easier to qualify unique properties, including non-FHA-approved condominiums.   

  • Non-Recourse Protection: Most proprietary reverse mortgages remain non-recourse loans, meaning the borrower or their heirs will never owe more than the home's fair market value when sold   

When to Consider a Proprietary Proprietary Reverse Mortgage Loan. These loans are best suited for homeowners with expensive homes, those seeking a larger lump sum, or those with unique property types that do not qualify for HECMs. These also have differing qualifications, such as you can qualify by being age 55 in Alabama,  Mississippi, Tennessee, and Georgia.

• Alabama has a minimum home value of $450,000. We do have a lender that goes to $300,000 and one to go lower * There is no way to pass a debt to your heirs, just like an FHA Reverse Mortgage.*Important Considerations with a Proprietary Reverse Mortgage.
  Borrowers remain responsible for paying ongoing homeownership costs, including property taxes, hazard insurance, and home maintenance. Failure to keep up with these expenses can cause the loan to become due immediately.
• Call Scott Underwood for more information on these Propietary Reverse Mortgage. Theu accounted for almost 50% of all Reverse Mortgages last year!