Borrower lived in their home for 15 years and then rented it out. They downsized and moved into a mobile home because of its proximity to a volunteer opportunity they wanted to serve with. Now three years later, the husband’s disability has worsened, and the wife has retired. Their tenant gave notice, so they’ve decided to move back into their single-family home as their primary residence. They will be moved back into the home before applying for the reverse mortgage. Are there any issues with this situation for a HECM? Other than a letter of explanation and making sure their driver’s licenses reflect the subject property, is there anything else we should be concerned with?
Based the scenario this appears to be acceptable. Owner occupancy is mandatory for a HECM. The borrower must be occupying the property as their primary residence prior to the time of application, typically for a year, however, less time requires additional review by the Underwriter. The borrower must explain in detail the overall situation, provide satisfactory evidence they are now occupying, clarify if they own other property, build on providing proof they intend to use the subject as their primary. The whole file with all documentation must be submitted before a definite underwriting answer could be provided.