Proprietary reverse loans give younger homeowners more options

"The product allows borrowers to retain their existing low-rate first mortgage while taking out a reverse second lien with no monthly payments. Finance of America's chief production officer, Jonathan Scarpati, said the program is currently available in about 15 states and open to homeowners as young as 55, compared with the FHA's HECM program, which requires borrowers to be 62 or older."

"HomeSafe Second does have somewhat limited availability today, because there are some state rules and regulations around the country that limit the opportunity for a second lien product. But, we are working with lobbyists to help them understand the why' behind and that is a secure solution for these customers, so I think that's going to change over the course of the next year or two."

HomeSafe Second is a reverse second-lien mortgage allowing homeowners to keep an existing low-rate first mortgage while accessing equity with no monthly payments. The program is available in about 15 states and open to homeowners aged 55 and older, unlike the FHA HECM program requiring age 62. Availability is limited by state rules and regulations, but lobbying efforts aim to expand access. The product targets pre-retirees and older homeowners with fixed incomes who face high rates, inflation, and debt-to-income constraints, enabling them to preserve favorable first-mortgage terms without refinancing while tapping needed cash.

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