Looking to close a HECM for purchase deal? Well, if you have a minimum net worth of $10 million, Sun West Mortgage Company might let you close it with them. See the email they sent to brokers/correspondents below:
On a ‘HECM-for-Purchase’ HUD requires that the Lender confirm occupancy within 60 days of closing and prior to the loan being insured with HUD. As such, there is an increased risk that may result from individual Borrowers’ behavior and/or circumstances.
Per the HUD FAQ, when purchasing a new principal residence, the HECM mortgagor has 60 days to occupy the home. Unlike a forward mortgage, there is an increased risk to FHA when the home is not occupied by the HECM mortgagor. Prior to closing, the HECM mortgagor and seller should agree to a date for physical occupancy of the property and the lender should confirm occupancy prior to their submission of the case binder to the local HOC for endorsement.
In light of this key factor, Brokers/Correspondents (with a minimum net worth of $10 million) are required to request SWMC for an special approval to submit HECM for Purchase transactions.
I’m sure they’re getting lots of requests for approval with only a $10 million net worth requirement. FYI… Financial Freedom is starting to close them on the 23rd and no 10 MM net worth requirement.