HUD reduces HECM Saver upfront fees to .01% of principal
The Department of Housing and Urban Development released more details on its latest reverse mortgage product, HECM Saver, which HousingWire reported in August. HECM Saver will have an upfront MIP of only .01% of the property's value, significantly reducing upfront costs. Under the HECM Standard option, the upfront mortgage insurance premium will remain at 2% of the value of the property, or 2% of the maximum FHA loan limit of $625,500, if the property has a value greater than that. Borrowers under HECM Saver are able to save so much money in upfront fees because the amount of money available to them, the "principal limit," is reduced, substantially lowering the risk to the FHA insurance fund. Loan amounts available are approximately 10% to 18% less than available under HECM Standard. The product is available for all transaction types and both a fixed rate and LIBOR or CMT based loan. "FHA designed HECM Saver as a second initial mortgage insurance premium option for the purpose off lowering upfront loan closing costs, for mortgagors who want to borrower a smaller amount than what would be available with a HECM Standard," said David Stevens, assistant secretary for HUD. Write to Christine Ricciardi.