I met with a Veterans Service Officer recently. He told me of some statistics in the county that were eye opening. 20% of the county's residents were veterans. He went on to say that nearly 70% of those were over the age of 60. Because many folks come into the county office for varied services, many of them have to do with hard-earned monetary benefits, he alluded to the fact that a lot of those veterans are on fixed incomes and are being squeezed by ever increasing taxes, home insurance costs, etc. Although I was there to discuss the VA loan program and to give him some information to help his clients, at that point in the conversation, I had to mention the Reverse Mortgage.
Some have asked if there is such a thing as a VA Reverse Mortgage. There isn't. Primarily because the Home Equity Conversion Mortgage insured by FHA now has the nationwide loan limit. Much of the discussions about VA getting involved were tied to the disparity in loan limits. VA was at $417,000 nationwide. FHA was tied to the old County limit system with some as low as $200,000 [rounded down a couple hundred dollars]. Once the new loan limits were put into place in late 2008, the need for another program largely dissipated.
Other changes were put into place, too. A limit on the origination fee with a cap of $6000 and a floor of $2500 was adopted. The nationwide limit was raised to above the conforming limit. It is supposed to revert to the Freddie Mac/Fannie Mae limit of $417,000 at some point. We have not reached that point, though. In most areas, the ceiling is $625,000--enough to cover most primary residential values. Age 62 is still the minimum age to qualify and the older the homeowner, the larger percentage of value that can be borrowed. While the Reverse Mortgage is not right for everybody, it is perfect for some.