Page 1 - AAG074_H4P Reference Guide for Loan Officers

HECM for Purchase Reference Guide

Reverse Mortgage Professional

Sales Contract Property Types

a Seller must complete all FHA-required repairs prior to a One to four family homes, townhomes, planned unit
closing development (PUDs), manufactured homes (see next
bullet point) & HUD-approved condos
aSigned copy of fully executed contract – all pages
a Ineligible property – co-ops, manufactured homes
a Amendatory clause and real estate certification produced prior to January 1, 1990, manufactured
documents - signed by seller, borrower and real estate homes installed or occupied previously at another site
agent(s) or location

a No seller paid fees allowed – even if common and aUnique properties accepted on a case by case basis
customary (see chart below)
a 99-year leasehold – lease must not mature until 50
a No personal property can be included years after the youngest borrower’s 100th birthday

a Closing date cannot be less than 30 days from receipt
of application package
Helpful Hints

a Value is the lesser of sales price, appraised value or
Counseling FHA Lending Limit (currently $636,150)
a The counseling certificate must have subject property a Always quote owner’s title even if borrower doesn’t
address and match exactly with the names on the want it
application
a Check if transfer tax is required by state or if needed to
quote

Funds aMust occupy home within 60 days of funding
a No borrowed funds – even if secured • “New Construction” - Builder’s rep to get HUD1s
from closed sales and give to the appraiser. Since
a No subordinate liens
most builders do not use MLS, the appraiser will
a Funds from sale of home – signed copy of Final HUD-1 need these for the appraisal.

a Checking, savings, investment or money market • Must have certificate of occupancy prior to taking
accounts application
• 60-day seasoning required on each account where
funds are coming from
• If coming from a retirement account or equivalent,
need to source funds coming out and show funds
going into bank account -Tom Selleck
AAG Paid Spokesperson
• Statements must show the following – name, “Bringing Stability to Your Retirement”
address, account #, name of institution
- Must have all pages, even if blank
- Most online statements do not show this

a Gift from Family – Gift Letter, Sourcing and Seasoning
Required (same as above)

• NO Gifts of Equity

For industry professionals only--not intended for distribution to consumers.
Please contact your local AAG representative for consumer information.