While reverse mortgages have been available to homeowners since 1961, the loans have been off limits to 澳洲幸运5开奖号码历史查询:housing co-operative (aka “co-op”) residents. Reverse mortgages allow older homeowners to borrow against their 澳洲幸运5开奖号码历史查询:home equity, but there are strict requirements for both borrowers and properties. 

Until now, homeowners in New York state could get reverse mortgages on one-, two-, three-, and four-unit homes or 澳洲幸运5开奖号码历史查询:condominiums but not co-ops. However, in early 2022, the New York State Assembly passed a bill making co-ops eligible for reverse mortgages. The law goes into effect on May 30, 2022, and New York state residents will finally be able to get reverse mortgages on 澳洲幸运5开奖号码历史查询:co-op apartments. Here’s how it works. 

What Is a Reverse Mortgage?

A reverse mortgage lets hꦿomeowners age 62 and older tap into their𓄧 home equity without selling or making monthly payments. Instead, borrowers receive a lump sum, monthly payments, or a 澳洲幸运5开奖号码历史查询:line of credit from their lender (or some combination of the last two).

These loans can provide 澳洲幸运5开奖号码历史查询:much-needed funds during retirement to pay for things such as basic living expenses, medical bills, and home repairs. 澳洲幸运5开奖号码历史查询:Unlike traditional forwar꧙d mortgages, no loan payments are due until the last borrower sells the home, moves out, or dies. 

Borrower Requirement♛s for Co-op Reverse Mortgages

Under the new law, a reverse mortgage for a co-op is called a “reverse co-operative apartment unit loan.” You must be at least 62 years old (the same minimum age requirement for most reverse mortgages) to qualify for the loan. If your co-op unit is held by tenants by the entirety or by 澳洲幸运5开奖号码历史查询:joint tenancy, the youngest person must be age 62 or older. Additionally, you must:

• 澳洲幸运5开奖号码历史查询:Meet with an ap♕proved reverse mortgage counselor and complete a 澳洲幸运5开奖号码历史查询:financial assessment to confirm that you’re financially qualified for the loan.
• Live in the property as your 澳洲幸运5开奖号码历史查询:principal residence.
• Get approval from your co-operative’s board of directors.

Reverse Mortgage Lenders Must Protect Borrowers

Starting May 30, 2022, New York state co-op residents age 62 or older can apply for a reverse mortgage. However, the new law puts t🧜he burden on rever𒈔se mortgage lenders to protect borrowers by requiring each lender to:

• Obtain a $100,000 surety bond to cover claims against the lender if it defaults on borrower obligations.
• Maintain a minimum capital of $10 million (the lender can rely on its parent company to meet the minimum capital requirements).
• Explain the reverse mortgage loan terms and how they comply with New York state law and U.S. 澳洲幸运5开奖号码历史查询:Department of Housඣing and Urban Development (HUD) standards.

The standards expressly require lenders offering reverse co-operative apart💎ment unit෴ loans to:

• Disclose the loan terms and payment schedule.
• Advise applicants to consult with the appropriate authorities regarding the loan’s tax and 澳洲幸运5开奖号码历史查询:estate-planning consequences.
• Describe the loan’s prepayment and refinancing features.
• Notify the borrower of the loan’s interest rate and estimated total interest.
• Name the events that could cause the borrower to default on the loan.

Additionally, a reverse co-operative unit loan is 澳洲幸运5开奖号码历史查询:non-recourse, meaning that you can’t owe more than the value of the co-operative unit stock certificate when the loan becomes due.

Reverse Mortgage Loan Payout Options

Once you sign the reverse mortgage loan agreement, you have a three-day right of rescission to cancel the loan without owing interest. After that, you have three main 澳🌞洲幸运5开奖号码历史查询:options for receiving your reverse mortgage money:

• Term Payment: The lender makes equal monthly payments to you for a fixed term of months that you choose.
• Tenure Payment: The lender makes equal monthly payments to you until the loan is paid out in full or becomes due and payable. 
• Line of Credit: You borrow some money now and leave some credit available for the future until the credit line is exhausted.

The Bottom Line

Reverse mortgages 澳洲幸运5开奖号码历史查询ℱ:ca🐼n provide supplemental income during retirement, which can be especially important if you’re on a fixed income. However, reverse mortgages involve several fees, including 澳洲幸运5开奖号码历史查询:origination fees, mortgage insurance, 澳洲幸运5开奖号码历史查询:closing costs, interest, and 澳洲幸运5开奖号码历史查询:servicing fees. Be sure to shop around and compa🌊re the costs of the loans♍ available to you before making any decisions.