The following property types are currently eligible:
Condominium units must be located in an FHA approved condominium project. If the condominium project is not currently approved, the borrower and the lender must submit an application to FHA requesting approval for the condominium project. FHA has strict approval guidelines that must be met and the approval process is long and arduous.Importantly, at closing, all existing liens against the property must be paid off or re-subordinated to the new Reverse Mortgage. If there are not sufficient funds available from the new Reverse Mortgage to extinguish existing obligations against the home, the borrower is required to bring funds to the closing in the amount of the difference. Similarly, all judgments against the individual must be paid off prior to or at closing. Finally, no borrower can be involved in an active bankruptcy proceeding. All bankruptcy proceedings must be discharged prior to closing.
Appraisers are required to evaluate whether a property conforms to the Federal Housing Administrations regulation regarding property condition. The property must conform to basic health and safety standards; heating, plumbing and electrical systems must operate as intended. The roof must have serviceable life remaining and must not leak. Wall surfaces must be in good condition and free from peeling paint.
Defects noted by the appraiser must be repaired. Health and safety issues must be resolved prior to closing whereas other repairs may be attended to after the closing with funds in the estimated cost of the repairs being withheld until the repairs have been corrected and inspected by the appraiser.