A newly launched junior-lien mortgage product does not require any monthly repayments. The only catch is that you have to be at least 55 years old to qualify.
The reverse second mortgage product, HomeSafe Second, was announced Wednesday by Finance of America Reverse. The product targets the growing population of pre-retirees and retirees who don’t want a traditional home-equity or mortgage product.
“More than 21 million homeowners aged 55 or older had a mortgage in 2021, according to data from the U.S. Census Bureau,” Finance of America Reverse President Kristen Sieffert stated in the news release. “We believe many of these homeowners could be potential HomeSafe Second customers.”
The proprietary reverse second mortgage has no monthly payment itself, though the borrower is still responsible for the existing first mortgage payment, taxes and insurance. The borrower and their heirs “will never owe more than the value of the home, as it is a non-recourse loan,” the announcement said.
The maximum loan amount is $4 million, and there is no minimum property value to qualify, the San Diego-based firm indicated. Proceeds can be utilized for any purpose except paying off the first mortgage balance.
Initially, the program is available in California, Colorado, Connecticut, Florida, South Carolina and Texas.