The product is initially available in California, Florida, and Texas
Finance of America Reverse has announced the addition of HomeSafe Second, a second lien reverse mortgage, to its proprietary HomeSafe suite of products.
The retirement loan products provider said the product allows homeowners to maintain their equity position and protect against interest-rate volatility with fixed-rate, non-recourse features. With HomeSafe Second, borrowers can benefit from a lower average cost of funds by leaving an existing low-rate first mortgage in place while using the second lien mortgage to access additional funds with no additional monthly payment.
The product is available for properties valued up to $10 million and allows for loan proceeds of up to $4 million. HomeSafe Second allows borrowers to use loan proceeds to repay other debt, excluding the first mortgage. Additional features include no monthly or annual mortgage insurance premium, no pre-payment penalties, and no FHA approval required for condos valued over $500,000.
“We know that home equity is a critical piece of a retirement planning strategy,” Finance of America Reverse President Kristen Sieffert said. “We also understand that reverse mortgages may not be the first tool people over 62 reach for when considering how to integrate this important asset into their wealth management plans. Now, they can have the flexibility of access to additional funds and the protection of a reverse mortgage without giving up the choice to leave existing financing with low rates in place.”
HomeSafe Second is available through the company’s retail and wholesale channels to borrowers in California, Florida, and Texas. The company expects to add more state in the coming months.
