Mark Miller is one of my favorite journalists who covers all things Baby Boomer on websites like Retirement Revised, 50+ Digital, and he also contributes to the Huffington Post. Over the weekend, Miller wrote about how the housing crisis is hurting seniors who are unable to sell their homes when they decide to move for health or lifestyle reasons.
As a result, continuing care communities are having problems attracting new residents due to the large upfront payment which is required for seniors to move into these types of communities.
"It’s usually structured so that you can take equity from the house, make that your entrance fee and then pay monthly based on need," says Larry Minnix, CEO of the American Association of Homes and Services for the Aging (AAHSA), an association of non-profit organizations that offer a continuum of aging services ranging from adult day services to continuing care retirement communities.
CCRC applications are declining, and some communities are responding by providing assistance to would-be home sellers. "Some are suspending or postponing entry fees," Minnix says. "Others are providing bridge loans or retaining real estate specialists to help people prepare and sell their homes. Everyone is trying to get creative in providing help." Some developers also are stressing development of more affordably priced housing units.
Miller writes that reverse mortgages are one potential source of help, with the ability to use a HECM to purchase a new home. While a HECM can’t be used for moves into retirement communities where the residents don’t own equity (such as CCRCs), the new rule can help facilitate sell-and-buy transactions by giving the seller the flexibility to accept a lower price and still afford a move.