'Spot' reverse mortgage loans for condo owners

For the past four years, Reverse Mortgage loans have been limited to single family homes, 2-4 units, and condos that are in an FHA-approved complex. This has proven a challenge for many owners of single condos who want a Reverse Mortgage, as the process of getting an entire development approved is lengthy and the waiting list is long. Journalist Ken Harney has reported that 'spot loans' may be making a comeback.

Until 2010, spot loans were allowed - and, unfortunately, abused by some shady real estate developers who applied for and received loans on inadequate and unsafe properties. At the time, the FHA lacked the ability to maintain proper oversight of those spot loans and disallowed them altogether.

Harney's article quotes FHA officials who believe that the organization is now much better equipped to handle spot loans, and that these will be safer than the original. There are no details yet as to when single-condo owners will be eligible to apply for spot loans, but for many this story is a hopeful development in their struggle to tap their home equity.

You can read the full article online here:
http://www.inman.com/2014/04/08/fha-facing-political-pressure-to-bring-back-spot-condo-loans/

Thank you for reading, and let me know if you have questions about your condo and whether it's approved by the FHA for Reverse Mortgage loans.

Ed Ramos (510) 610-5223 - ed.ramos@fpfmail.com