Despite the possibility of the Home Equity Conversion Mortgage (HECM) changing due to the $800 million subsidy request, the US Department of Housing and Urban Development is considering adding an additional reverse mortgage product to serve the needs of the senior population.
Last week at the Mortgage Bankers Association conference in San Diego, CA, Meg Burns, Director of the Office of Single Family Program Development at HUD, said that its looking at offering a HECM “mini” along with the HECM currently available.
Currently being developed, the details are scarce but, Burns said the product gives seniors the means to receive a fixed amount of money with a smaller principal limit.
Depending on the structure of the program, Burns said that HUD may need to do some regulatory work. HUD is in the process of looking at what would happen if consumers start choosing the HECM mini, would it set off a waive of refinances and create a churning effect.
Burns wouldn’t give a specific date on when to expect the program but she said that “HUD will be reaching out to the industry to gather feedback” as it gets closer to being finished.
While this isn’t the first time the HECM “mini” has been brought up, it sounds like HUD is serious about the product.