Senior Homeowners Get Lift From Housing Bill

Buried in the new housing bill (The Housing and Economic Recovery Act) is some very good news for seniors whose main asset is the family home.

The new law makes it easier and less expensive for seniors to access the cash value of their homes on a tax-free basis through a reverse mortgage, and expands the amount that can be borrowed.

Reverse mortgages had nothing to do with the mortgage mess -- they are a safe and easy way for homeowners age 62 and older to maintain control and ownership, while tapping their home equity for tax-free cash.

Now there will be a higher borrowing level on FHA reverse mortgages -- with $625,000 of home value as a cap, and a $417,000 borrowing limit. Fees will be capped at 2% of the first $200,000 borrowed, and 1% on the balance -- with an absolute maximum of $6,000 in fees. ...