Focus Taiwan is reporting that the Taiwanese government plans to work out a feasibility and implementation plan for a reverse mortgage program for senior citizens in the second half of this year.
The plan will be jointly developed by the MOI and the Financial Supervisory Commission, according to Jiang Yi-huah, Minister of the Interior.
According to a decision reached in January by the Council for Economic Planning and Development (CEPD), the program will be given a trial run in 2011, with “house rich, cash poor” senior citizens being the main targets.
Two models will be made available, one of which is reverse mortgage that allows a homeowner to defer the obligation to repay the loan until he dies or leaves, or the home is sold. The other is sale-and-leaseback, which requires that a homeowner sell the property. However, the original homeowners can pay a small rent to remain in the house.
CEPD officials said the equity release program will be especially helpful to senior citizens who live in poverty but are ineligible for the allowance to low-income households because they own real estate.