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home is considered track home in trailer park. We pay ground rent and taxes yearly. Is there a bank that would give us a reverse mortgage under these conditions. Help in Pennsylvania.

3 Thoughts on We own home in adult community paid cash 120000 for home five years ago. Can’t get reverse mortgage because?
  1. Reply
    July 12, 2013 at 8:38 am

    NO since you do not own the land.

  2. Reply
    reverse mortgage guy
    July 12, 2013 at 8:49 am

    Unfortunately the bank misinformed you when you took out the loan. Any manufactured home that is not permanently affixed to the foundation on the land that is owned by the property is not considered real estate as the land and the home must be permanently joined to be considered real estate by residential lenders, including reverse mortgage lenders.

    You can move your home to your own land and try again, however mobile home’s are becoming difficult to finance with reverse mortgages even when permanently affixed to land due to ongoing changes to the FHA guidelines.

  3. Reply
    July 12, 2013 at 9:42 am

    Unlikely. You have a 2-part question. You say you have a track home and you pay ground rent.

    Depending on how you define track home, a reverse mortgage is very specific on loans on manufactured homes, i.e. it must be built after 1976, still have its FHA plates affixed and must be attached to the ground permanently, among other things. If your home has all 3, the home may be eligible. However, part 2 comes in.

    You also say you pay taxes yearly, but I am guessing you are referring to income taxes – not property taxes since you are renting the land. Reverse mortgages do not look at income or credit scores in order to qualify. Typically, Reverse mortgages require you own the land but they can be done on leasehold property wherein you do not own the land, but you must have a lease good through the youngest borrower’s 150th birthday (even assuming they have long gone) or good for 99 years, as is common in places like Hawaii. I somehow doubt that is what you have in PA where you are most likely on a month to month or an annual lease.

    As a suggestion, you may be able to get some other kind of loan on the home like they do for cars as collateral (hard money), but it wouldn’t be a reverse mortgage and you would want to read the fine print very very very well. These loans are typically very short term with high interest and usually used as temporary bridge loans or for desperate times.

    I have one more suggestion. I am assuming your home is no longer worth $ 120,000, since you would have bought it in 2006 during the real estate bubble. Would you be willing to move and upgrade? Assuming you are over 62 years old (mandatory for a reverse mortgage), you may want to consider selling what you have, even if at a loss, and using that as a down payment to BUY another primary residence using a reverse mortgage. For the same reason your current home is not worth what it once was, you can probably now upgrade to a better home, to include the land, for probably what you paid in 2006 since the better homes have also gone down in value. Since 2009, FHA allows a senior to purchase a primary residence using a reverse mortgage, but you will need a sizeable down payment (how much depends on your age). Hopefully, the proceeds from the sale of your track home would give you that. However, the good news is that once you get the reverse mortgage and purchase the new house, you will not have any mortgage payments for as long as it is your primary residence. But, since you now own home AND land, you will now have to pay property taxes and continue to pay homeowners insurance. Hope this makes sense.

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