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A Guide To Aging In Place
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A study about HECM reverse mortgages recently released by HUD’s Office of Policy Development and Research sheds light on the characteristics of HECM borrowers and shows how the “typical” borrower has changed in recent years as the HECM program has matured:
| Changes in the Typical HECM Borrower | ||
|---|---|---|
| Characteristic: | 2000 HUD Report |
FY 2006 HECM Loans |
| Median Age | 75 | 74 |
| Single Females | 56% | 44% |
| Single Males | 14% | 17% |
| Couples | 30% | 39% |
| Median Value of Property | $107,000 | $289,000 |
| Initial Principal Limit (Max. That Can Be Borrowed) |
$54,890 | $159,000 |
Single female homeowners are still the dominant HECM borrower group, but single males and, especially, couples are an expanding presence in the market.
The value of the homes that seniors are getting a HECM on has more than doubled in the last 6 years.
The initial principal limit has increased by almost 300%.
The purpose of the report is to provide data on HECM loans that will “enhance the development of an efficient secondary market for HECM loans” -- or in other words, to help create a market for investors for this product. It is important to have active investors in the secondary market able to attract private investor dollars is viewed by many as critical to the future growth of the reverse mortgage industry and to provide availability of the reverse mortgage product to seniors who want it.
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