Per federal law, a reverse mortgage is only available to home owners who are 62-years-old or older, and who have substantial equity in their homes. The reverse mortgage (aka the “senior reverse mortgage” or the “reverse annuity mortgage”) converts the equity in the home into a liquid asset so that borrowers are able to remain in their homes, while paying their expenses. The loan product is called a “reverse” mortgage because repayment is not required until a specific event occurs. Specific events include, for example, the death of the borrower, the borrower going to live in an assisted living facility, or the property being sold. Because there is no repayment until one of these events occur, unpaid interest is added to the principal and the loan debt grows (i.e., negative amortization). Here, because Catherine Abioye is only 59-years-old, she is too young for a reverse mortgage. Provided she qualifies in other ways, however, she will be considered a non-borrowing spouse and the reverse mortgage loan amount available to the Abiuoyes will be based upon her age.
A is incorrect. Senior housing is unrelated to reverse mortgage, age-related loan limits. Note: There are two types of senior housing recognized under federal law. While there are other policies and procedures which must be satisfied, age-related criteria for senior housing are as follows: There is a “62+ exemption” and a “55+ exemption.” For the 62+ exemption, all residents must be 62 years of age or older. Certain caregivers and maintenance staff are excepted from this rule. For the 55+ exemption, 80% of the housing units must be occupied by at least one person who is 55-years-old or older. B is incorrect. Under the federal Equal Credit Opportunity Act, it is unlawful to discriminate against a legally and mentally competent credit applicant on the basis of age. Here, however Catherine Abioye is not a credit applicant because she is too young, per federal rules, to apply for a reverse mortgage. D is incorrect. Per federal law, reverse mortgage borrowers must be 62-years-old or older. A younger, non-borrowing spouse will lower the loan maximum available to borrow.
Incorrect answer. Please choose another answer.