A state program in Oregon that allows low income seniors to remain in their homes by covering their annual property taxes will no longer accept applicants with reverse mortgages, according to program changes passed this year. Current homeowners in the program were notified on July 1 that they will need to reapply for the program under the changes by July 25.
The state’s Senior and Disabled Property Tax Deferral Program, which allows Oregon homeowners who are at least 62 years of age and have no more than $39,500 in annual taxable income to defer tax payments that are later made up when their home is sold, will no longer accept applicants with reverse mortgages, according to the state’s Department of Revenue.
“The deferral program recovers its funds from the sale of properties leaving the program,” the state’s revenue website explains. “If there is no equity left in a home, there may be no way to pay back the deferred taxes. This leaves the program with fewer funds to help other seniors in need. For that reason, the 2011 Legislature barred reverse mortgage properties from the program.”
An Oregonian article published earlier this month noted the change for reverse mortgage borrowers, and reported that a spokeswoman for the Oregon Department of Revenue said that of 2,200 phone calls received in response to the program changes, a number of the calls were from people with reverse mortgages who are worried about having to pay next year’s property taxes.
Other changes to the program include stricter asset limits and income criteria, and specify that homeowners had to live in the qualifying house for at least five years.
Written by Elizabeth Ecker