Proprietary Loan -Jumbo Reverse
Jumbo reverse mortgages – also known as proprietary reverse mortgages – are loans designed and offered by financial institutions that enable owners of high-value homes to access greater amounts of their home equity than is available from the government insured HECM reverse mortgages.
In response to the substantial increase in home property values in certain parts of the United States and federally insured HECM reverse mortgage loan to value limitations, some reverse lenders have come out with their own versions of the government backed HECM (home equity conversion mortgage) program. These programs have the same safety provisions of the federal housing administration HECM program. The loan is still non-recourse; the title stays in the homeowner’s name, the children still inherit, so on and so forth.
What is significantly different is that we can use full property values up to $10 million to make a loan of up to $6 million dollars. There are no payments required for these jumbo reverse mortgages.
Many clients are sitting in $1 to $10 million dollar homes and condominiums and living on only a pittance of social security. The capital gains taxes to sell in the current housing market are onerous. The children cannot help them to make ends meet. They cannot qualify for a traditional loan or a line of credit. The traditional Department of Housing and Urban Development types of reverse mortgages don’t adequately utilize the property value to make sense. That is where a proprietary Jumbo Reverse with a higher lending limit can be a safe and secure potential reverse mortgage loan solution.
Here are some examples of how we have worked with legal and financial professionals to assist their clients with this product.
A couple in their mid 60s have a home in Los Angeles valued at $1.5 million and needed money to pay off bills and build an ADU that will create an additional $30,000 a year of rental income so that they can both retire.
Loan proceeds and loan to value ratios are tied to the borrowers age and home value. Property taxes usually remain the responsibility of the borrower. These types of reverse mortgages have no mortgage insurance premiums and are not regulated by the department of housing and urban development. They can be both adjustable home equity conversion mortgages and fixed rate cash out loans.
We use six different companies for HECM loans and five different companies for these proprietary Jumbo Reverse Loans. Are you, a client or a loved one sitting on millions of dollars of untapped home equity while living on only social security and a small pension? Are you making ends meet with credit cards each month? Or spending down your IRA or 401k plan?
Give us a call and lets collaboratively design a proprietary Jumbo Reverse loan that can be a solution. Or simply fill out your request on our Custom Proposal page.
For eligibility considerations, see our In-Depth Information.