CRMP Borrower Qualification Requirements 3

Question 1

A HECM borrower moves to an assisted living facility for more than 12 consecutive months. What happens to the loan?

Accepted Answer

The loan becomes due and payable because the home is no longer the primary residence

Answer

If a borrower vacates the property for more than 12 consecutive months for medical reasons, the HECM becomes due and payable.

Question 2

Which statement about the minimum age requirement for a HECM borrower is accurate?

Accepted Answer

All borrowers on title must be at least 62 years old

Answer

HUD requires every borrower whose name appears on the HECM loan to be at least 62 years of age.

Question 3

An applicant owns a four-unit property and lives in one unit. Is this property eligible for a HECM?

Accepted Answer

Yes, properties with one to four units are eligible if the borrower occupies one unit as their primary residence

Answer

HECMs are available for one-to-four unit properties as long as the borrower occupies at least one unit as their principal residence.

Question 4

What is a 'fully-funded LESA' and when is it required?

Accepted Answer

A set-aside that covers the full life expectancy of projected property charges, required when financial assessment reveals severe credit issues

Answer

A fully-funded LESA is required when Financial Assessment indicates a borrower has both insufficient residual income and unsatisfactory credit history, covering property charges for the borrower's entire projected lifespan.

Question 5

Which citizenship or residency status makes a borrower ineligible for a HECM under FHA guidelines?

Accepted Answer

Undocumented non-citizen without lawful immigration status

Answer

FHA requires HECM borrowers to be US citizens or lawfully present non-citizens; undocumented individuals do not meet this requirement.

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CRMP Borrower Qualification Requirements 3