Just Approved: FHA condo approval grants breathing room for borrower

Published 3:55 pm, Friday, August 19, 2016 Mortgage agent: John Holmgren. Property type: Condo in Alameda. Loan type: FHA HECM reverse mortgage. Rate: 4.463 percent initial rate; 9.463 percent lifetime maximum. Backstory: Ruth Masonek of Preferred Properties contacted John Holmgren about an Alameda client who had recently been laid off. Unable to find new employment, the client struggled with her mortgage payment and other financial obligations, as Social Security was her only income. While the homeowner had a good equity position in her home, the sale proceeds would not be enough for her to pay all cash for a replacement residence. Holmgren evaluated her prospects for qualification for a new home purchase. While he found that she would not qualify to buy a new home in the Bay Area, she would qualify for a FHA reverse mortgage. The HECM reverse mortgage is a federally insured loan product that eliminates mortgage payments by allowing interest to accrue until such time as the homeowner no longer lives in the home. Since it was important that the property appraisal come in at a particular value to make the reverse mortgage possible, Holmgren also contacted one of his local appraisal sources to confirm that the appraised value was likely to be sufficient. In this case, the challenging factor was that the condo project was not FHA approved, a requirement for anyone wanting to get an FHA reverse mortgage. Based on his experience with regular home mortgages, Holmgren knew that it was possible to secure FHA condo project approval fairly readily. He coordinated efforts with the homeowners association, the unit owner and a project approval consultant to secure project approval in less than three weeks. Once this approval was obtained, the reverse mortgage was secured and now the homeowner will be able to live in her home as long as she wishes without financial insecurity. John Holmgren, Holmgren & Associates, (510) 433-8809, john@mortgageholmgren.com.