Home Equity Conversion Mortgages (HECM's)

September 2008

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Monthly Report for HECM cases endorsed for insurance by Fiscal Year. This HECM report describes selected loan and borrower characteristics by fiscal year. The report list the number of HECM cases endorsed by fiscal year, average interest rates, average property values, average maximum claim, average initial principal limit, the average age of the borrower, gender of borrowers and active cases. The report also describes the State breakdown of HECM endorsed cases and active cases.

HECM's are the only reverse mortgage program insured by the Federal Government. HECM loans are insured by the Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD).

HECM loan amounts are based on borrower age, home value and current interest rates. Payments to the homeowner may be set up as an annuity, or else as a line of credit. The HECM program limits the loan origination costs, and FHA guarantees that the lender will meet their obligations to the homeowner. HECM loans are the lowest-cost, multipurpose reverse mortgage available and in most cases they provide the largest total case benefits.

FHA ensures that the homeowner will receive all payments due as long as they remain in the home. FHA also guarantees the lender that, when the property is sold, it will receive full payment of the loan balance, up to the maximum claim (guarantee) amount established when the loan is originated.