You must meet the following requirements to qualify for a Louisiana reverse mortgage.

• 62 years or older;
• The home is your primary residence;
• Maintain insurance;
• Make property tax payments;
• Maintain FHA minimum property standards;
• Own the house or settle the balance with the proceeds from the reverse mortgage;
• Hold no federal debt, like income taxes, federal student loans, or other federal debt.

No other income, credit, or additional requirements exist to qualify for a reverse mortgage in Louisiana. This can be helpful for those with less than stellar credit who want to tap into the home equity on their principal residence.

There are costs associated with a reverse mortgage loan in Louisiana. These can include the following.

• HECM Counseling Fee: This is a mandatory federal government requirement. The cost will vary.
• Origination Fee: The cost to originate the loan, which is capped at $6,000 for reverse mortgages.
• Closing Costs: Closing costs can include taxes, appraisals, title searches, surveys, and more. The fees will vary from loan to loan.
• Mortgage Insurance Premium: You are required to pay a mortgage insurance premium on reverse mortgages. There will be an initial amount at closing. It can be rolled into the life of your loan and is on top of homeowners insurance.
• Interest: Like any loan, reverse mortgages have a set interest rate. Depending on the loan type, it can be fixed or variable.

Consult with a District Lending reverse mortgage specialist to understand the total costs of a reverse mortgage in Louisiana.

If you die without settling the reverse mortgage loan, your heirs will have to cover the balance. The loan is due and payable within 30 days. They can consult with a professional to get an extension of up to six months.

The Consumer Financial Protection Bureau outlines that heirs will need to repay the loan balance in full or 95 percent of the home’s appraised value, whichever is lower. Additionally, the loan can be repaid with the home’s equity. Any leftover equity will be distributed to your heirs.

If they want to sell the home, they must use the proceeds of the sale to cover the reverse mortgage. Anything else will be paid to them.

The home must be your primary residence, so if you sell or move out, you must repay the reverse mortgage loan. Additionally, if you don’t meet the FHA requirements, including minimum living standards, staying current on property taxes, etc., you may need to repay the loan immediately.

While there are many benefits associated with a reverse mortgage loan, there are some risks, too. Failure to uphold the requirements of the loan may result in the loss of your home. If people live with you, they may be without a home after you die.
District Lending will meet with you to help you understand what risks you may face in the HECM program and if they are worth the reward you will get.