The Federal Housing Administration (FHA) provides insurance protection for the reverse mortgage loan program to aid in protecting both the lender and the borrower. In the event the amount owed by the borrower is more than the value of the property, the difference will be covered by the FHA. Any payments due to the borrower are also protected by FHA to ensure that the borrower receives all payments.
If someone outlives the value of the home and there is more owed on the mortgage than the appraised value, the borrower can continue to live in the home and the shortfall is covered by the mortgage insurance through FHA.
Borrowers can rest easy knowing that their loan is insured by the FHA mortgage insurance program. Contact Fairway Independent Mortgage Corporation for more information about a reverse mortgage.