Reverse Mortgage Funding announced this week it is offering a new, annually adjusting reverse mortgage product. The new loan, the HECM Annual, joins the recent introduction of RMF’s HECM Max5 product, and shares some similar qualities.
The HECM annual has a 5% interest rate cap that is applied to the company’s first annual adjusting HECM. The annual interest rate is tied to the One-Year LIBOR Index and has a lifetime cap of 5% above the initial rate. Additionally, the loan offers a 2% “interval cap,” which ensures the rate will never increase or decrease more than 2% in a given year.
All payment plans are available under the new RMF product, including lump sum, line of credit, monthly payments or a combination of the payment plans.
“We believe reverse mortgages can be a powerful tool for qualified borrowers. This product extension means more options for adult homeowners,” said Joe Demarkey, director of product development for RMF. “In addition to innovative products, which are the cornerstone of our company, we continually review our portfolio against industry standards to ensure we are offering our customers the best options.”
The HECM Annual is open ended, with no minimum initial draw, like other variable rate HECM products in the market.
The introduction of the new product comes following an announcement last week from the Federal Housing Administration of new principal limit factors for HECM reverse mortgages. The changes will make more proceeds available for borrowers on the older end of the age spectrum relative to what they have been eligible to borrow previously.
Reverse Mortgage Funding recently outlined plans to hire a team of 50 retail salespeople to its growing employee base. The company has recently spelled its plans for an Independent Public Offering and has reportedly raised $230 million among private investors toward the establishment of a REIT that it expects to later acquire the company.
Written by Elizabeth Ecker