HECM Saver: The Impact of FHA’s New Reverse Mortgage Program

The Department of Housing and Urban Development is expected to roll out the HECM Saver in the coming weeks, no one knows what sort of impact the HECM Saver will have on the marketplace.

Designed to address one of the biggest complaints of reverse mortgages, the HECM Saver offers borrowers less money at a lower cost.

When it’s rolled out, the product will reportedly have a 0.01% upfront mortgage insurance premium and 1.25% annual MIP. Much lower than the 2% upfront MIP and 1.25% annual MIP charged to HECM Standard borrowers. In theory, lowering the upfront costs should expand the number of reverse mortgages borrowers, but the industry isn’t so sure.

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