Hi there, it’s Angella Conrard, your reverse mortgage advisor. Most of today’s reverse mortgages are FHA-insured and require an FHA appraisal. To qualify for an FHA-insured reverse mortgage, your home must meet the minimum standards outlined by HUD.
Your appraiser will inspect your home inside and out. The appraiser will document any repairs needed for your home on your inspection report. Some of these repairs must be completed before your loan closing. Generally, these repairs affect the use, safety & marketability of your home.
Examples of common repairs required to be completed before the close of your loan would include:
- Missing smoke or carbon monoxide detectors
- Leaky roof
- Peeling paint
- Missing hot water heater straps
- Empty pool or a pool with a non-functioning filtering system
- Other safety issues –bars on windows that have no release latch
Some repairs may be completed after your loan closes. If this is the case, your lender will establish what’s called a repair set aside. These are funds that are set aside from the reverse mortgage proceeds for the use of making those repairs. Your lender will set aside funds equaling 150% of the cost to complete the repairs. The lender may charge an administration fee to process this set-aside. The fee is not more than 1.5% of the repairs or $50 for processing. Once you have completed your repairs, there will be a re-inspection of your home to document their completion.
Repairs that may be done after the close of your loan generally do not affect the livability or safety of your home, such as:
- Flooring or carpet repairs
- Minor plumbing leaks
- Minor electrical repairs
- Cracked windows
- Screen repairs
If you have a reverse mortgage question, call me Angella Conrard, a reverse mortgage advisor and certified reverse mortgage professional. It’s my pleasure to be of service to you!
