U.S. House Passes Bill to Relieve Senior Citizen Expenses
Hawaii Reporter, July 27th, 2006
The U.S.
House today passed a bill that I co-sponsored to enable more senior
citizens to utilize their home equity toward health and other expenses
common to seniors.
Among other provisions, H.R. 5121, the Expanding American Homeownership
Act of 2006, facilitates the issuance of reverse mortgages, an
increasingly popular product with seniors. Reverse mortgages allow
homeowners to withdraw home equity for expenses while deferring loan
repayment until the owner dies or the home is sold.
The number of reverse mortgages insured by the federal government
nationwide more than doubled from 18,000 in 2003 to 43,000 in 2005, as
more and more seniors on fixed incomes have found these loans to be
extremely helpful in keeping up with medical costs, home improvement
costs, property taxes and other expenses," said Case. "As of last
April, a total of about 200,000 such loans have been insured. This bill
will remove the statutory cap that has limited the Federal Housing
Administration (FHA) to insuring 250,000 reverse mortgages-a level that
will be reached next year.
The FHA's reverse mortgage program enables homeowners who are at least
62 years of age to withdraw some of the equity in their home in the
form of monthly payments, in a lump sum, or through a line of credit.
This allows seniors to obtain a loan against their homes that does not
have to be paid back for as long as they live in the home. Under
current law, FHA is limited to a total of 250,000 such loans which
cannot be used to buy another home.
Read more of this article. Learn more about Reverse Mortgages