Home Equity Conversion Mortgage

Overview

This page provides information on Home Equity Conversion Mortgage (HECM) Counseling for Housing Counselors, and provides two sets of resources for Origination and Default Counseling.

FHA insures a reverse mortgage known as HECM. Reverse mortgages allow homeowners to convert equity in their homes into income that can be used to pay for home improvements, medical costs, living expenses, or other expenses. The equity that the homeowner builds up over years of making mortgage payments can be paid to the homeowner.

HECM Origination Counseling assists seniors through the process of determining if they are qualified for and obtaining a loan. Counselors cover a number of required topics including eligibility, loan amounts and loan limits, and future repayments. HECM Origination Counselors must be certified, registered within FHA Connection, and are required to maintain education on a bi-annual basis.

HECM Default Counseling assists seniors who are at risk of defaulting on HECM loans. Although monthly payments on reverse mortgages are not required, there is still a risk of default if the borrower fails to pay real estate taxes, homeowner association fees, or local assessments (e.g., sewer); maintain hazard insurance; or remain in the property as the principal residence. Default Counselors are not required to be HECM roster counselors.

Client Budget and Resource Identity Tool (CBRIT)

This tool is intended for HUD Certified HECM Housing Counselors. CBRIT replaces the Financial Interview Tool (FIT). The Resource Identity portion of CBRIT helps counselors direct HECM clients to various non-HECM resources for which they may be eligible and provides instructions for accessing those resources.

Access CBRIT

Origination Counseling

Origination Counseling

This page provides guidance on HECM Origination Counseling, including already existing HECM guidance from HUD.

HECM Default Counseling

Default Counseling

This page provides new guidance on HECM Default Counseling recently released by HUD.