Texas Seniors Now Have Full-Fledged Reverse Mortgages

March 23, 2006 - Texas senior citizens now have the same options as seniors in the rest of the nation to convert a portion of their equity in their homes into tax-free income with a reverse mortgage.

"A 15-year battle is over, with financial companies now able to sell the same package of reverse mortgage loans as in the rest of the nation," reports business writer David Hendricks in the San Antonio Express-News today.


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"Texas voters overwhelmingly approved a constitutional amendment allowing reverse mortgage lines of credit in November. But the U.S. Housing and Urban Development Department and Fannie Mae had to review the new law before agreeing to insure and buy the loans sold through banks, credit unions, mortgage companies and other brokers."

On March 17, the U.S. Department of Housing and Urban Development released a long awaited mortgagee letter that announces the availability of a line of credit option for FHA reverse mortgages along with the ability to fund on any business day of the month in Texas.

The line of credit option, which has been available in every state in the nation except Texas until now, allows a way for seniors to request a specific amount of money as needed while the balance benefits from a growth rate. The growth rate allows for the credit line balance to grow at a rate that is competitive.

Texas has been the only state that mandates that reverse mortgages are only allowed to fund on the first business day of the month. With the change of this mandate, seniors no longer have to wait sometimes up to a full month to receive payment from a reverse mortgage. Senior Texans will now be able receive their funds four business days after they close on a loan bringing quick and much needed relief to senior homeowners.

In addition to greater flexibility of how and when borrowers can receive money, F.H.A. has raised the minimum lending limit to $200,160 in Texas. This increase allows some seniors with higher value homes to receive a substantial amount of more money from their homes equity compared to last years lending limit.

Some of this report was provided by Griffin Financial Mortgage, LLC, headquartered in Fort Worth, Texas.