Sell your large home, use proceeds as a downpayment on a smaller home and use a reverse mortgage to finance the remainder of the purchase and you will have no mortgage payment for the remainder of your life or while the home is your primary residence. Any remaining equity can be passed to heirs.

Opes is an approved Reverse Mortgage Lender and can help you or a loved one who is over 62 to access equity monthly to help wtih living expenses, or to use a reverse mortgage to purchase a home with no mortgage payments for as long the borrower lives in the home. Owner will only be responsible for property taxes, insurance, and upkeep of the home + HOA dues, if any.

From the HUD website:

The Home Equity Conversion Mortgage (HECM) is FHA’s reverse mortgage program which enables you to withdraw some of the equity in your home. The HECM is a safe plan that can give older Americans greater financial security. Many seniors use it to supplement social security, meet unexpected medical expenses, make home improvements and more. You can receive additional free information about reverse mortgages in general by contacting the National Council on Aging at (800) 510-0301 or downloading their free booklet, “Use Your Home to Stay at Home,” a guide for older homeowners who need help now. It’s smart to know more about reverse mortgages, and decide if one is right for you!

1. What is a reverse mortgage?

A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. The equity that built up over years of home mortgage payments can be paid to you. But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence or fail to meet the obligations of the mortgage. You can also use a HECM to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing.

2. Can I qualify for FHA’s HECM reverse mortgage?

To be eligible for a FHA HECM, the FHA requires that you be a homeowner 62 years of age or older, own your home outright, or have a low mortgage balance that can be paid off at closing with proceeds from the reverse loan, and you must live in the home. You are also required to receive consumer information free or at very low cost from a HECM counselor prior to obtaining the loan. You can find a HECM counselor online or by phoning (800) 569-4287.

3. Can I apply if I didn’t buy my present house with FHA mortgage insurance?

Yes. It doesn’t matter if you didn’t buy it with an FHA-insured mortgage. Your new FHA HECM will be FHA-insured.

4. What types of homes are eligible?

To be eligible for the FHA HECM, your home must be a single family home or a 1-4 unit home with one unit occupied by the borrower. HUD-approved condominiums and manufactured homes that meet FHA requirements are also eligible.

5. What’s the difference between a reverse mortgage and a bank home equity loan?

With a traditional second mortgage, or a home equity line of credit, you must have sufficient income versus debt ratio to qualify for the loan, and you are required to make monthly mortgage payments. The reverse mortgage is different in that it pays you, and is available regardless of your current income. The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home, sales price or FHA’s mortgage limits, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you may borrow.

With a HECM, you don’t make monthly principal and interest payments, the lender pays you according to the payment plan you select. Like all homeowners, you still are required to pay your real estate taxes, insurance and other conventional payments like utilities. With an FHA HECM you cannot be foreclosed or forced to vacate your house because you “missed your mortgage payment.”

6. Will I still have an estate that I can leave to my heirs?

When you sell your home, you or your estate will repay the cash you received from the reverse mortgage plus interest and other fees, to the lender. The remaining equity in your home, if any, belongs to you or to your heirs.

7. How much money can I get from my home?

The amount you can borrow depends on:

• Age of the youngest borrower
• Current interest rate
• Lesser of the appraised value of your home, the HECM FHA mortgage limit for your area or the sales price
• The initial Mortgage Insurance Premium (MIP) option you choose (2% HECM Standard option or .01% HECM Saver option)

You can borrow more with the HECM Standard option. Also, the more valuable your home is, the older you are, and the lower the interest rate, the more you can borrow. If there is more than one borrower, the age of the youngest borrower is used to determine the amount you can borrow. For an estimate of HECM cash benefits, select an online calculator from the HECM Home Page. You can use an like the one on the AARP website to get an idea of what you may be able to borrow.

8. Should I use an estate planning service to find a reverse mortgage?

FHA does NOT recommend using any service that charges a fee for referring a borrower to an FHA lender. FHA provides this information free, and HECM housing counselors are available for free or at very low cost, to provide information, counseling, and a free referral to a list of FHA-approved lenders. Search online or call (800) 569-4287 toll-free, for the name and location of a HUD-approved housing counseling agency near you.

9. How do I receive my payments?

You have five options:

• Tenure – equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.
• Term – equal monthly payments for a fixed period of months selected.
• Line of Credit – unscheduled payments or installments, at times and in amounts of your choosing until the line of credit is exhausted.
• Modified Tenure – combination of line of credit with monthly payments for as long as you remain in the home.
• Modified Term – combination of line of credit plus monthly payments for a fixed period of months selected by the borrower.

An appraisal will be required. These loans can also be used for temporary financing while an owner waits on an SBA loan or other financing to come through on a property, and can be funded in as little as 10 days. These loans are generally used to fill a temporary need when borrower, property, or both do not meet underwriting guidelines and would not qualify for a loan through traditional borrower channels.

Commercial Loans/Mixed Use
Apartment Buildings 5+ units
Will lend up to 65% LTV in first or second position

Residential, non owner occupied ONLY:
Will lend up to 65% LTV in first or second position

Hotels and Motels
Up to 65% LTV in first or second position

Probates and Conservatorships (great product for heirs who may need money to prepare a property for sale)
50-58% LTV in first position only

Union Bank has been lending on buildings in San Francisco for many years and used to be one of the primary banks that did jumbo loans used to finance multi-unit buildings held as TIC interests.

If your are part of a TIC group that has an existing Union Bank mortage on your multiple unit building, contact me to find out if your group can do a portfolio express refinance, and/or find out if our new group TIC financing loans can provide you an opportunity to refinance in conjunction with a sale of one or more of the units.

No new borrowers may come onto the loan (as during a sale of one unit) with the Portfolio Express refinance product.

Realistic Loan to Value ratios: finance 80% of your building’s value. Have a loan of $800,000?  Your building must appraise for just $1M to qualify. 4 unit with a loan of $1,200,000? Appraisal would need to come in at $1.5M. Up until now, our only investor allowing TIC group loans would only go to 65% LTV–not much help for buildings whose value has stayed at a standstill or dipped over the last few years.

Maximum Loan Amounts.
2 units: $800,775  (fast track but still want to refi? choose a 5/1 ARM with rates around 4%.)
3 units: $967,950
4 units: $1,202,925

OK to use during sale of one or more units! As long as at least one current owner stays on title, transfers of partial interests are allowed.

Qualify as a group, not individuals. Good news if you may have one weak borrower but overall, have enough income in your group cumulatively to qualify.

TIC agreement is not part of documentation required for this loan. Your TIC agreement and debt obligation agreement remain private, although full asset/income documentation is required.

Owner occupied and non-owner occupied are OK.If there are any non-owner occupied units in the building, there is an additional fee. This can be assigned to the NOO borrower during close of escrow so owner occupied units do not incur any additional cost during refinance.

ARM loans and 30 year fixed loans are available. Have you been in the lottery for several years already? Perhaps a 5 or 7 year fixed rate will carry you through conversion. Why pay for a 30 year rate when you can save by fixing your rate only for the time you need? 5/1 ARM rates close to 4%, 30 year fixed rates still under 5% for most borrowers/buildings.

What if you are already in the process of condo converting? Congratulations!  You may not need a refinance, but soon enough, you’ll need to refinance your current group or fractional loans into condo loans. I can provide you with hands-on service from lottery win through final recordation of your condo and into your new, individual condo loan.

Why choose me for the refinance  of your TIC property? I have purchased, refinanced, converted and sold TICs and understand the entire process from the owner, Realtor, and financing  perspective.

But what will my rate be and how much will this cost? Each building and borrower is unique—contact me to request a custom refi scenario for your building. I will do a free analysis to help you see how much money per month a refinance will save you and your TIC group.

After 2 years: Conforming loan OK with 20% down.
After 3 years: FHA loan OK (low downpayment, lower FICO score OK) even if you were in default at time of sale. FHA loans have unique upfront costs and require mortgage insurance.
After 4 years: Conforming loan OK with 10% down and mortgage insurance. Can sometimes be OK to purchase after bankruptcy after 4 years.
After 7 years: OK to purchase after bankruptcy

If you are positively planning to sell or refinance your home in the next few years, an adjustable rate loan that’s fixed for 3, 5, 7 or even 10 years can provide you even lower rates! The current rates on a 5-year fixed loan that adjust 1 time per year after that are below 4% per year.

Contact me for a free graphed analysis to see whether a refinance could save you money each month, and whether it makes sense for you. If we can’t save you hundreds per month, we’ll advise you to keep your current loan.

Ongoing litigation, including some structural defect cases

High number or percentage of non-owner occupants / investor owners

Delinquent HOA dues

These loans have moderate rates, considering the highly specialized niche they’re for. This mortgage program might just allow you to get a great price on condo in a troubled building, that could prove to be a great investment in the long run.

Consult your Realtor for more information about the risks and potential rewards of purchasing in a building that’s got “issues”

Other important info:
20% down required
Maximum loan amount $417,000
Excellent credit score required

Contact me for complete guidelines or to apply.

Other information:
1. Purchase loan only, obtain this loan in conjunction with a regular first mortgage or on its own as a first position mortgage. Not for refinance.

2. Buyer must never have owned any property in San Francisco. A borrower who lives in another city, works for SFPD, and wants to purchase a home in San Francisco as a new primary residence would qualify.

3. No maximum income limit. This program is meant to encourage more San Francisco Police to purchase homes and reside in the city they serve.

4. No maximum assets test, no purchase price limit, no minimum or maximum downpayment. No household size requirement.

5. Borrower must obtain a Homebuyer Education Certificate from the Sity of San Francisco to apply. Please contact me for a schedule of classes near you. No charge to attend.

6. May be combined with other City of San Francisco Mayor’s Department of Housing programs.

Are you in law enforcement and interested in learning more, and/or applying for this program when purchasing a home? I have one more incentive for law enforcement personnel, including administrative, supervisory, dispatch positions and retired law enforcement: I will cover the cost of your credit report up front, and reimburse you for your appraisal for you when closing ANY purchase or refinance loan with me. Must provide proof of employment with SFPD or any other law enforcement agency in the Bay Area.