Return of the Reverse Mortgage?

The FHA now permits seniors 62 years and older to PURCHASE residential real estate using a reverse mortgage. Until recently, reverse mortgages insured by FHA were only available on homes already owned and occupied by eligible borrowers. Beginning this spring, the agency allows you to BUY a duplex, tri-plex, or quadruplex - using a reverse mortgage.

That means you can buy a multi-unit property with an FHA reverse mortgage, live in one unit while renting out the others, and avoid paying a dime towards your monthly principal or interest.

Among the advantages to SENIORS is that if and when they choose, they can refinance the property, pay off the reverse mortgage debt, move out and convert the unit into all-rental so the entire building is investment property, and make it eligible for a 1031 tax exchanges.

I am typically an anti-reverse mortgage kind of guy, but I can see this new ruling provides some additional benefits - especially for renters. Do you see this is a strong selling point, or has anyone by chance seen/heard about an increase in numbers?

Niman Singh
Property Management Software