Statutory Requirement

To be eligible for a federally-insured Home Equity Conversion Mortgage (HECM), a homeowner must receive counseling from a HUD-approved counseling agency. Here is the federal law that spells out this counseling requirement. “The Secretary shall provide or cause to be provided by entities other than the lender the information required in subsection (d)(2)(B) of this section. Such information shall be discussed with the mortgagor and shall include:

• options other than a home equity conversion mortgage that are available to the homeowner, including other housing, social service, health, and financial options;
• other home equity conversion options that are or may become available to the homeowner, such as sale-leaseback financing, deferred payment loans, and property tax deferral;
• the financial implications of entering into a home equity conversion mortgage;
• a disclosure that a home equity conversion mortgage may have tax consequences, affect eligibility for assistance under Federal and State programs, and have an impact on the estate and heirs of the homeowner; and
• any other information that the Secretary may require.”

Counseling by Telephone

HUD-approved counselors are available to provide HECM counseling by telephone. If you have already read all the pages at www.aarp.org/revmort/ and are seriously considering applying for a reverse mortgage, you may find a telecounselor at www.hecmresources.org. Click on the Counseling Requests link, and then the USA Map.

Lenders

HUD Lenders – The HUD lender list is located at www.hud.gov/offices/hsg/sfh/hecm/hecmlenders.cfm/