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Torres & Co. Lending > Reverse Mortgages > HECM (Hipoteca de conversión de patrimonio neto de la vivienda)

HECM (Hipoteca de conversión de patrimonio neto de la vivienda)

HECM (Home Equity Conversion Mortgage)

A Home Equity Conversion Mortgage (HECM) is the most common type of reverse mortgage, insured by the Federal Housing Administration (FHA). It allows homeowners 62 or older to convert a portion of their home equity into cash while continuing to live in the home.

What Is a HECM?

A HECM enables seniors to access home equity through monthly payments, a lump sum, or a line of credit, without making monthly mortgage payments. Instead, the loan is repaid when the borrower moves out, sells the home, or passes away.

How It Works

  • Eligibility: Homeowners 62+ with significant equity.
  • Property Types: Primary residences only (single-family, FHA-approved condos, some 2–4 unit homes).
  • Credit Requirements: No minimum FICO, but lenders review credit history and ability to pay property charges.
  • Down Payment: Not required (uses existing equity).
  • Mandatory Counseling: HUD-approved reverse mortgage counseling required.
  • Repayment: Loan is repaid when the home is sold, refinanced, or no longer the borrower’s primary residence.

Benefits

  • No monthly mortgage payments.
  • Access equity to supplement retirement income.
  • Multiple payout options (lump sum, monthly payments, or line of credit).
  • FHA insurance ensures borrowers never owe more than the home’s value.

Fun Facts & Insider Details

  • Non-Recourse Loan: Heirs are never personally liable beyond the home’s value.
  • FHA Insurance: Protects both lenders and borrowers.
  • Popular Use: Often used to delay Social Security benefits or cover medical/retirement expenses.

Who Is the Best Candidate?

  • Seniors 62+ seeking retirement income.
  • Homeowners with substantial equity but limited monthly cash flow.
  • Borrowers who want to age in place.

FAQs – HECM

  • Yes, you remain the homeowner as long as you meet occupancy and tax/insurance requirements.

  • No. As long as you live in the home and meet program rules, the loan continues.

  • Heirs can sell the home, refinance, or let the lender take ownership.

Next Step

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⚖️ Disclaimer: This guide is for educational purposes only. Loan approval and terms depend on credit, income, assets, property type, and program guidelines.

Torres & Co. LendingHECM (Hipoteca de conversión de patrimonio neto de la vivienda)