FAR Launches HomeSafe Second: The Only Second-Lien Reverse Mortgage Product Empowering Older Americans to Tap Home Equity Without Making Monthly Payments

Rhea-AI Summary

Finance of America Reverse (FOA) has launched an enhanced version of HomeSafe Second, a unique reverse mortgage product tailored for homeowners aged 55 and older. This product allows seniors to access their home equity without affecting their low-interest first mortgage payments. With over 21 million homeowners aged 55+ in 2021, the need for flexible financing solutions is significant. HomeSafe Second offers a maximum loan of $4 million, with no monthly payment requirements. Initially available in select states, this non-recourse loan aims to help older Americans meet their financial goals amidst rising costs.

Positive

• Launch of HomeSafe Second, a reverse mortgage product for homeowners 55+.
• Provides access to home equity without monthly payment impact on first mortgage.
• Maximum loan amount of $4 million available, attracting a large potential customer base.
• Addresses financial challenges faced by seniors, including inflation and healthcare costs.

Negative

• None.

Innovative reverse mortgage product provides flexible financing solution, gives homeowners access to cash while preserving their low-interest-rate first mortgage

SAN DIEGO--(BUSINESS WIRE)-- Millions of older Americans have, in recent years, secured or refinanced their mortgages into record-low interest rates compared to today’s higher rates. Many of these homeowners are also seeking ways to access the equity from significant home-price appreciation to supplement their cash flow needs, pay off high-interest bills, or make upgrades to their homes. Recognizing this growing, largely unmet need for pre-retirees and retirees seeking flexibility, leading retirement mortgage solutions innovator Finance of America Reverse (“FAR”) today announced the launch of an enhanced version of HomeSafe Second.

HomeSafe Second is the only home equity product of its kind that gives older homeowners an alternative to a home equity loan, home equity line of credit, cash-out refinance, or a personal loan by enabling them to access their home equity without impacting their monthly budget or low-interest-rate first mortgages.

“More than 21 million homeowners aged 55 or older had a mortgage in 2021, according to data from the U.S. Census Bureau. We believe many of these homeowners could be potential HomeSafe Second customers,” said Kristen Sieffert, President of FAR. “With inflation, rising healthcare costs, and diminishing retirement accounts, older homeowners are facing a litany of challenges that are putting a strain on their finances. This game-changing product enables older homeowners to unlock the power of their home equity without impacting their household budget while they live in their home.”

HomeSafe Second is a fixed-rate, proprietary reverse loan that allows borrowers to tap their home equity via a second mortgage with no monthly payment requirement (other than required tax and insurance payments and their existing mortgage payments) and no change to the interest rate on their first mortgage. The enhanced version of HomeSafe Second now makes homeowners 55 and older* eligible for the loan. HomeSafe Second will initially be available in California, Colorado, Connecticut, Florida, South Carolina, and Texas, with the goal of expanding to more states in the coming years.

Sieffert added, “We’re excited to continue to grow the reverse market and help more customers use their home equity in strategic ways to realize the possibilities of retirement.”

The Consumer Benefits of HomeSafe Second

Home equity for seniors reached a record $11.81 trillion in the third quarter of 2022, according to research from the National Reverse Mortgage Lenders Association. For older homeowners, a HomeSafe Second loan might help them meet their financial and retirement goals.

HomeSafe Second loans may be used for any purpose except to pay off the first mortgage balance, and it can only be used behind a traditional forward mortgage. Loan proceeds are income tax-free and funds are distributed via a lump-sum payment at closing with a maximum loan amount of $4 million. The homeowner or their heirs will never owe more than the value of the home, as it is a non-recourse loan, and there is no minimum home value to qualify.

Potential loan uses include:

• Paying down high-interest credit card or medical debt;
• Investing in a vacation home, rental property, or business venture;
• Funding home improvement projects or renovations;
• Covering tax obligations or purchasing insurance policies or annuities.

Britany Luth, Senior Vice President of Business Optimization at FAR, said, “We remain focused on growing our potential customer base and introducing more homeowners to the benefits of home equity, and this exciting product will help us accomplish those goals. FAR is agile about responding to market conditions, and we're proud to help even more homeowners thrive in their later years with this loan option.”

Additional information about HomeSafe Second, including full product details and loan terms, is available on the product section of the FAR website.

*HomeSafe Second customers in Texas must be 62 or older to qualify.

About Finance of America Reverse

As a retirement solutions company and part of the Finance of America Companies (NYSE: FOA) family of companies, Finance of America Reverse is committed to empowering people with the tools they need to achieve financial independence and get to work on retirement. Through its team of Licensed Loan Officers and network of professional and wholesale partners, Finance of America Reverse offers products and services designed to help older Americans include home equity in their retirement plans. The company is licensed nationally and is a proud member of the National Reverse Mortgage Lenders Association (NRMLA).

View source version on businesswire.com: https://www.businesswire.com/news/home/20230201005345/en/

For Finance of America Media Relations: pr@financeofamerica.com

For Finance of America Investor Relations: ir@financeofamerica.com

Source: Finance of America Reverse

FAQ

What is the HomeSafe Second product by FOA?

HomeSafe Second is an enhanced reverse mortgage product allowing homeowners aged 55 and older to access their home equity without affecting low-interest first mortgage payments.

Where is HomeSafe Second available?

HomeSafe Second is initially available in California, Colorado, Connecticut, Florida, South Carolina, and Texas.

What are the benefits of HomeSafe Second for homeowners?

The product allows homeowners to tap into their home equity without monthly payment obligations, helping them manage financial challenges while enjoying retirement.

How much equity can homeowners access through HomeSafe Second?

HomeSafe Second offers a maximum loan amount of $4 million, subject to eligibility.

Who is eligible for the HomeSafe Second loan?

Homeowners aged 55 and older are eligible for the HomeSafe Second loan, while those in Texas must be 62 or older.