It is a good alternative. However, HECM upfront costs generally result in a cost of greater than 5% for each dollar of net proceeds available to pay off existing mortgages and distribution to the borrower or purchase a home.

The interest rate is the 1 Month LIBOR plus a margin of 2.95% and
adjusts monthly. And yes the LTV is under 30% for a borrower just 62
years of age. This is a jumbo product and is meant for higher value
properties where a 30% LTV would yield a considerably higher benefit
then a HECM. Property values are capped at $10m on this product. The
only reason I mentioned it was to offer an alternative to the gentlemen
who had a borrower that did not want to borrower as much and pay fees in
excess of $20k, but really this is more of a solution for property
values in excess of $1.5m. And yes, the total fees represent 5% of the
benefit in the example I provided (no different then a HECM) but
consider a property value of $1.5m where the benefit would be $420k and
the fees of about $14k would represent only slightly over 3% of the
benefit. And as the property value escalates the fees as a percentage
decline further due to a cap on the origination fee. There is also a
credit line growth rate that is fixed for life regardless of the amount
of funds used and represents .5% of the property value annually.

So what are the interest rates? The less than 30% LTV is miserable unless that is all of the cash that the senior will ever need. This is about a 5% upfront total cost for each dollar of available proceeds.

HERA was enacted on July 30, 2008. Senior coop owners have been waiting for almost 14 months for a Mortgagee Letter. My crystal ball is cracked and clouded when it comes to predicting the implementation date on HECMs for coops.