A development planned for the southwest Chicago town of Oak Forest has big ideas for senior housing. Priory Estates, a plan of Weso Development, aims to build 110 duplex residences on 55 duplex lots, joining the ranks of Illinois’ age restricted housing communities. The community will be approved for people who are ages 55 and up.
There’s a direct correlation between the timing of the development and the aging baby boom demographic, and the HECM for Purchase will be one way for seniors to buy into these new homes, whether they are downsizing or upsizing.
“We’re looking at these units as being a tremendous alternative to condo living,” says Jerry Pinero, a developer on the project. “Especially for seniors, it’s implied that if you’re going to live in a condo, you’ll have stairs or elevators. With these, you pull up, you pull in or out. It’s suitable for people who are 65 or 75 and they can stay there for the rest of their lives.”
Pinero cites the Pew Research figure that 10,000 people each day in the U.S. are turning 65. Recent trend findings on the demographic also bode well.
According to Evanston, Ill.-based Mather LifeWays Institute on Aging, of the top 10 senior living trends, two were “choice and value” and the number one tend was aging in place. “Residents will seek services and programs that will support ‘aging well’ in place,” said the study, which was based on a survey of 600 senior living organizations representing more than 1,000 communities across 15 states.
Senior housing communities have always offered an option, but the aging in place trend may also lead some to seek new homes where they can stay for years to come. With many families having lost retirement income, some may turn to reverse mortgages to finance these moves.
The HECM for Purchase allows borrowers to take their home equity from one home and use it toward another in one fell swoop.
Data from Reverse Market Insight (above) shows the volume of HECM for Purchase loans actually declined in 2010 for the majority of the top 15 states for HECM for Purchase loans, after gaining some popularity following its launch in January 2009.
(See RMD’s report on the first year of the program, which posted growth from just 18 units in its launch month, to more than 130 in December 2009.)
Still, many say, the product is widely unknown, compared with its HECM Standard and growing HECM Saver counterparts. That may not be great news for Priory Estates, but the development hopes the growing age bracket will help the product gain popularity—along with all reverse mortgages.
“It’s a parallel between the 55+ community and reverse mortgages,” says Pinero of the timing of the project. “The awareness of this type of product is out there, there’s no doubt about it. It’s been so scarcely utilized; only just in the last five to seven years have they gained in popularity.”
If all goes according to Weso’s plan, the project should break ground by the end of 2011, just as the first baby boomers are turning 66.
“I have never seen a necessity for a particular product to the extent that I see the necessity for this now,” he says.
Written by Elizabeth Ecker