Finance of America Reverse (FAR) today announced a series of changes to its product suite of HomeSafe proprietary reverse mortgage loans, including the addition of a revolving line of credit with a growth feature for its HomeSafe Select loan and additional rate options for HomeSafe Standard and HomeSafe Flex, respectively.
The product changes aim to increase the homeowner’s potential borrowing power as they continue to age, and is designed to meet the needs of borrowers who may have variable cash-flow needs, according to a company press release announcing the changes.
HomeSafe product changes
HomeSafe Select now features access to a revolving line of credit, where up to 75% of available funds can grow for future use. It is also designed to provide an option for a borrower who may find other types of financing options too restrictive.
The new changes to HomeSafe Select also aim to create options for drawing down from a borrower’s credit line later in retirement, which can afford them the benefits of a large credit line without having to accrue interest.
“This bigger line of credit option is a major development for seniors and underscores why I joined a team that consistently strives to deliver new and improved solutions in response to market demand,” said Dan Hultquist, VP of organizational development at FAR in a press release announcing the changes. “While our HomeSafe Select product is already popular with homeowners, they now have the peace of mind that a line of credit can provide, without the burden of a required monthly principal and interest payment.”
The addition of a line of credit growth feature is also designed to highlight the advantages of FAR’s proprietary reverse mortgage products over a more traditional Home Equity Line of Credit (HELOC) loan, Hultquist says.
“When you factor in the line of credit growth, the elimination of a monthly repayment obligation and no term limits on repayment, the additional advantages of HomeSafe Select over a traditional HELOC are crystal clear,” he says.
Additionally, the alternative HomeSafe Standard and HomeSafe Flex loan options now have a rate option of 4.99%, which is aimed to allow borrowers access to an additional low-rate option.
FAR receives Moody’s originator assessment
On top of the announced product changes, Moody’s Investor Services has also issued its third rating of FAR, affirming its Average assessment as an originator of proprietary reverse residential mortgage loans. The assessment also noted that FAR’s property valuation, closing practices and technology were all “Above Average,” according to the assessment.
“We are especially proud to have received above average ratings in the areas of property valuation, technology and closing practices,” said Kristen Sieffert, president of FAR in a statement regarding the Moody’s assessment. “We care deeply about the long-term satisfaction of those with whom we do business, and continue to invest to improve the consumer experience, our products, and processes, so we can help homeowners unlock their home equity to help ensure financial security in retirement.”
HomeSafe product line
HomeSafe Standard is a full draw, fixed rate loan that offers the ability to customize features for borrowers seeking low costs or maximum proceeds. It offers a lump sum payment with no initial limitations on available funds, no prepayment penalties and, like a traditional Home Equity Conversion Mortgage (HECM), is a non-recourse loan.
HomeSafe Standard was followed upon in June 2018 by “HomeSafe Flex,” which allows for more flexible draw of the loan’s proceeds. The company added “HomeSafe Second” that September, the first-ever second-lien reverse mortgage.
Just a month after that in October, the introduction of “HomeSafe Select” marked the arrival of a proprietary Home Equity Line of Credit (HELOC) loan to the product suite, which was recently made available in the state of Florida. FAR also announced a shift to private label servicing for its entire HomeSafe product line in December 2018.