Generation Mortgage Co., specializing in reverse mortgages, is now offering Home Equity Conversion Mortgage (HECM) for Purchase products in Texas.
The company's decision to offer HECM for Purchase products in Texas is a result of last fall's ballot in which residents voted to pass a new constitutional amendment authorizing the sale of the product in the state.
Insured by the Federal Housing Administration, the HECM for Purchase is a loan allowing seniors 62 years of age or older to purchase a home while enjoying the advantages of the HECM program, including no monthly principal and interest mortgage payments. A senior can use the proceeds from the HECM for Purchase loan on his or her current residence to purchase a second residence that is located closer to relatives.
Prior to Nov. 5, Texas had been the only state in the country that did not permit seniors to use an HECM loan to purchase a new home.
‘Due to Texas' conservative homestead laws, conversion mortgages first became available in the state in 2000, which was much later than in many other areas of the country,’ explains Colin Cushman, president and CEO of Generation Mortgage Co., in a release. ‘However, after just 13 years, Texas is now the second-largest HECM-producing state and represents nearly nine percent of the market. That type of growth shows there is significant demand for HECM products in Texas, and with almost a quarter of the state's homeowners aged 65 or older, we anticipate that the HECM for Purchase product will be quite popular among seniors who are looking to retire to a smaller home or to a different part of the state.’