A letter signed by eight members of Congress that urges the Department of Housing and Urban Development to allow co-ops under the HECM program has circulated among policymakers. Addressed to Housing Secretary Shawn Donovan, the letter stresses the high number of co-ops in the United States and the disadvantage seniors face by living in them and not being able to qualify for a HEMC loan.
“With over one million housing cooperative units in the United States today, thousands of these home owners are impacted by not being able to access HECMs,” the letter states.
In particular, New York residents who live in co-ops comprise a substantial portion of this population.
“If done well, reverse mortgages have the potential to help older consumers, especially those who own co-ops in NYC,” said Rep. Carolyn Maloney (D-N.Y.), one of the signing members of Congress. “Often these seniors’ homes are their largest asset. By freeing up the equity in those homes, seniors can remain in their homes and live comfortably.”
Further, the letter underscores the importance of the HECM program at this point in time, as many seniors find themselves struggling financially.
“In today’s housing market, your assistance in removing HECMs from the ‘back burner’—would be invaluable to the economic and physical health of older Americans struggling to stay afloat in this economy,” the letter states. “…we urge you to issue home equity conversion guidelines, giving our seniors who own shares in housing cooperatives the same opportunity to access HECMs as all other home owners.”
The latest from HUD on the HECM program and co-ops was a statement from a HUD spokesman in late 2010 which noted the department was evaluating the HECM program for co-ops to determine if it would meet HUD’s financial requirements.
Written by Elizabeth Ecker