For years, HECM lenders have tried to launch a privately insured reverse mortgage product in the state of New York, but have been stopped by repeated regulatory roadblocks that prevent the implementation of non-agency reverse mortgages.
But now, it appears one lender has broken through the barrier, as Finance of America Reverse announced Tuesday that is has successfully launched its proprietary reverse mortgage, the HomeSafe Standard, in New York.
In the last 18 months, as the private reverse mortgage market has exploded with six different lenders bringing new products to market, the push for acceptance in New York has only intensified, especially considering the fact that home values in the state present sizable equity-tapping opportunity.
Proprietary reverse mortgages differ from their federally insured counterparts in that they are not bound by the Federal Housing Administration’s loan limits, which max out at $726,525 for most areas of the country.
Instead, most all non-agency reverses allow older homeowners with higher-valued homes to access up to $4 million of their equity, often with a full-draw, fixed-rate loan.
With home values in New York surpassing most other markets around the country, it’s easy to see why the state presents so much opportunity for proprietary reverses.
On top of that, New York ZIP codes are home to more Baby Boomers than markets in any other state, meaning more homeowners are 62 or older – the qualifying age for the government’s HECM and most proprietary reverses.
According to the lender, the HomeSafe is the first proprietary reverse to be approved for origination in the state in more than a decade.
“True to our ongoing innovation and leadership within the industry, we are thrilled to provide homeowners in New York with a new solution to tap into their home equity – bolstering their access to capital in support of their retirement goals,” said FAR President Kristen Sieffert.
“We are proud to see such strong demand for our proprietary offering from suitable borrowers and believe that our commitment to them lasts through the entire life of their loan,” Sieffert added. “Advisors and wealth managers now have access to a tool with a proven ability to put their client’s hardest earned asset to work.”
FAR has led the charge on the proprietary reverse mortgage front, issuing an array of HomeSafe variations with features like a line of credit or a second-lien option, exceeding what is offered through the FHA’s HECM.
Its Standard product accommodates properties valued as high as $10 million, offering proceeds up to $4 million in a lump sum without mortgage insurance or out-of-pocket closing costs.
“Given areas of New York have some of the highest home values in the nation and the large population of Baby Boomers both entering and enjoying retirement, the need for this product is staggering and the potential impact for borrowers is very exciting,” said FAR’s VP of Wholesale Jonathan Scarpati, a recent HousingWire Rising Star. “We’re proud to provide a new solution to our partners and advisor channels who haven’t had an option like this before.”