Condo Reverse Mortgage
Getting a reverse mortgage for a condo can be tricky. The condo board has to meet guidelines set forth by the FHA. FHA guidelines requires that at least 10% of the association's annual budget be set aside for reserves. Condo boards are not required by law to comply if they don't want to. Additionally, another guideline is that no more than 10% of the condo owners can already have a reverse mortgage insured by the FHA. This rule is a FHA guideline to limit their losses. However, the rule means if the condo has 50 units, no more than 5 owners are able to obtain a reverse mortgage through the FHA.
Additonal Condo Requirements
- The owner-occupied ratio must be greater than 50% of the units. Non-owner occupied units that must stay below 50% of the total include both rentals and 2nd homes that are not the owner’s primary residences.
- No more than 15% of the unit owners may be more than 30 days behind on HOA dues.
Specifically, condo owners who apply for a reverse mortgage have to wait at least 8 weeks so HUD is able to confirm that the dwelling meets their lending standards. In reality, many condo owners have reported closer to 18 to 20 weeks.
Reverse Mortgage RequirementsAssuming your condo meets all of the requirements, there are a few requirements for all borrowers. You must have 62 or older and either own the home without a mortgage or owe very little on the mortgage. No credit and income qualifications are necessary to get a reverse mortgage.