Reverse Mortgage Funding (RMF) has expanded its Home Equity Conversion Mortgage (HECM) and proprietary reverse mortgage offerings into the state of Hawaii, a move which gives RMF the ability to serve customers in all 50 states across the country. On the wholesale and correspondent sides, RMF’s associated lending businesses are also now able to purchase loans within the state.

While the lender has been buying and servicing reverse mortgages in Hawaii for some time, this move gives RMF the ability to originate and underwrite its own loans within the state. Hawaii law requires a mortgage lender to have a physical presence in order to be approved for a mortgage license and offer such products to its residents.

Consequently, the company has set up a physical location in the state in order to gain its new license, and will be able to offer the full suite of reverse mortgage products which are both proprietary, and those backed by the Federal Housing Administration (FHA).

Why Hawaii is a good fit for RMF

Several favorable factors will allow Hawaii to be a good fit for RMF and prompted this move according to Percy Ihara, a reverse mortgage specialist with the company who will be leading its newly-opened branch in Honolulu on the island of Oahu.

“The average single family home value in Hawaii is nearly $1 million and the median value of condominiums is around $445,000,” Ihara tells RMD. “Additionally, Hawaii has the most seniors per capita in the U.S. and ranks first in the nation for life expectancy with an average age of 81.3.”

Additionally, Hawaii is also home to an older workforce, a cohort which may be looking for options to age in place while potentially still working, Ihara explains.

“Hawaii is also among the leaders in the percentage of 55-and-up adults who are in the workforce, meaning that for those seniors who still desire to work (or who still need to), opportunities are likely to be plentiful,” he says.

This newest development is the culmination of a lot of dedicated work that the company has planned for some time, according to Mark O’Neil, national sales leader for wholesale and correspondent at RMF.

“RMF has been buying closed loans from Hawaii for years,” O’Neil tells RMD. “The plan has always been to enter Hawaii for broker and P/A business as soon as we were able to line up the personnel. We found the right person in Percy, and we are proud to finally be licensed in all 50 states.”

What this expansion means

For RMF, the ability to now offer its products in all 50 states constitutes a major achievement that will only help to add to the visibility and availability of reverse mortgages, in addition to giving Hawaii homeowners additional options to tap into the equity they’ve built up over the years in their homes. This is according to David Peskin, president of RMF.

“Expansion into Hawaii is a milestone. We can now do business in all 50 states, helping more seniors live comfortably and confidently in the homes they love,” Peskin said in an announcement of the expansion. “Hawaii is an especially attractive state for retirees. With 19% of the population age 65 or older and an average home value of over $600,000, many homeowners may consider a reverse mortgage to meet their retirement planning needs.”

As the lender’s primary point person in Hawaii, Ihara also has served as publisher and editor of Generations Magazine since 2010. He is also the host of Generations Radio Podcasts, a weekly series on aging and senior issues. Ihara has nearly 20 years of experience in the reverse mortgage industry, saying he believes in the product’s capabilities in allowing certain seniors to age in place.

“RMF has opened a branch in Honolulu, managed by Percy Ihara. Percy is a fantastic hire for RMF, with his extensive knowledge of the industry and products as well as his expertise in helping seniors age comfortably in place,” said Richard Thorpe, national sales leader of distributed retail at RMF. “Percy will be covering all the Hawaiian Islands out of this location for the short term, and our long-term plan is to grow the salesforce over the next year. We are thrilled to be able to offer our brokers who cover Hawaii the ability to offer not only RMF HECM, but Equity Elite as well.”

The uniqueness of the state

According to the home value index curated by Zillow, homes in the state of Hawaii have a typical value of over $718,000, and average home values in the area have risen roughly 8.3% in the past 12 months. 2019 estimates place Hawaii’s population at just over 1.4 million residents, with roughly about 270,000 of those residents being over the age of 65 according to the U.S. Census Bureau.

According to previous outreach conducted by RMD about reverse mortgage business in the state of Hawaii, the state has unique attributes that are not commonly found in other states across the country. Just some of these, according to one area originator, includes Ohana Dwelling Units – or a second home permitted on a lot where the zoning normally allows for just one home.

Other unique components that can be found in Hawaii include single-family homes in condominium property regimes, and lava flow hazard zones which can be found on “the Big Island” of Hawaii itself. Multi-generational housing can also be common, sometimes in Ohana Units, to assist with costs for certain families.

These, and other unique attributes related to geographical and topographical features as well as home values can be challenging, but Ihara is confident in his ability to manage them given his prior experience in dealing exactly with these and other kinds of difficulties.

“Hawaii is unique from any other state,” Ihara told RMD. “Its neighbor islands have their own county building codes and restrictions, such as the active Kilauea volcano where catchment and septic systems are more prevalent. There are appraisers living on each island, although with the current influx of sales and refinancing, appraisal times have slowed. With 31 plus years of lending experience, knowledge and local contacts in the appraisal and banking industry, I have closed loans on all islands and have experience with most building types on all islands.”

Ihara will be serving the entirety of the state from his central office in Honolulu, something which is made far more feasible now due to the wide availability of information and communication technology. That doesn’t mean that hiring specialists to cater to each of the islands is out of the question, however.

“With the technology boom because of more people working remotely, we can service all islands from one office currently,” Ihara told RMD. “I do and will fly out to every island; however, I see in the future hiring a reverse mortgage specialist for every island.”