Over the weekend, Redding News published an article about a couple who used the HECM for purchase program to downsize and move to a warmer climate. John and Susanne Ferry, both 62, have been trying to sell their home for three years but haven’t had any luck, even after reducing their listing from $700,000 to $498,000.
There plan was to use the money from the sale of their home to downsize to a new location, but with the housing market where it’s at, it hasn’t worked out that way. All of that changed when they found out about the HECM for purchase program which allowed them to purchase their dream retirement home last week on a house in Tuscany Villas, a 55-and-older community in north Redding.
Using a reverse mortgage purchase for purchase program, the Ferrys made a $150,000 down payment – money they took out of savings and some investments – and the reverse mortgage paid the $200,000 balance on the $350,000 home. "It’s just wonderful. We wanted this house so much," Susanne Ferry said of their home in Tuscany Villas.
The Ferrys worked with Chris Lamm of Security 1 Lending in Redding. "Some seniors see the advantage in this program in being able to downsize into a smaller, less maintenance home and one that is more energy efficient," Lamm said.
Joe Rodola, a Housing and Urban Development reverse-mortgage counselor based in Redding, said he doesn’t know whether there will be a market in Shasta County for the reverse mortgage purchase program. The median sales price of a home in Shasta County is under $200,000.
"It’s really an unknown market," Rodola said. "I couldn’t tell you how many seniors are sitting out there with $60,000 or $80,000 that would like to buy and still can’t afford to… A lot of it at this point is that nobody really knows it’s out there."
How to downsize with a reverse mortgage