If you own your home with no mortgage, you have a good deal of money in your home known as equity. This is the amount of money you would receive for selling your home, minus selling expenses. But what if you need this money now and can’t or don’t want to sell your home? The solution might be a special program for seniors, commonly called a reverse mortgage, formally administered by the federal government as a HEMC. It is called a reverse mortgage because instead of you making payments – you receive money instead. This money is then paid back after you later decide to sell your home or after you pass away. This HECM program is one of the best ways to stay in your home and receive the money you need to meet expenses.
The HECM program is managed by the United States Department of Housing (HUD) and the basic program requirements are:
• Be 62 years of age or older
• Own the property free and clear or have a small mortgage balance remaining
• Occupy the property as your principal residence (you can still own a vacation home as well)
• Not be delinquent on any federal debts (such as income taxes)
• Must attend a consumer information and counseling session given by an approved HECM counselor – in advance of formally applying
• Only available through a HUD approved HECM lender
For seniors who don’t own their own home or otherwise qualify for a HECM, then the Section 202 program administered by HUD can help them to obtain affordable housing. This type of assistance is only available to people 62 years old and up, plus they must be considered as low income. This usually means that your household income is less than 50% of the local area’s median income. Eligible persons can then get subsidized rental housing, in Section 202 approved developments. Approved applicants will only have to pay 30% of their net income as rent. These Section 202 developments must meet the standards of appropriate senior housing as set forth by HUD.
This program works by providing property owners (landlords) with tax credits in return for offering low rent residences to low income tenants. The definition of low income is again usually less than 50% of the local area’s median income. Many of these participating properties are specifically for seniors, either over 55 or 62 depending on the individual development.
The federal government has several programs to assist senior homeowners to repair or improve their homes. This is especially true if the work needed is to fix health and safety issues or make the home more accessible for seniors with mobility problems. The assistance is available with some grants (no repayment) or loans that are often with deferred repayment. The Federal Housing Agency (FHA) manages most of these programs and the federal Veteran’s Administration (VA) runs these types of programs for homeowners who are armed services veterans.
For senior homeowners who live in areas with cold winters or hot summers, paying for their energy bills can be a major problem. The LIHEAP program can help low income seniors with their heating and cooling energy costs, bill payment assistance, energy crisis assistance, weatherization and energy-related home repairs. To be eligible, your annual income must be under $20,000 for a single or $27,000 for a couple. People already receiving SSI assistance are often automatically eligible for this program. LIHEAP is administered by the U.S. Department of Health and Human Services ( the social security people).
In addition to affordable housing programs from the federal government, many states also have their own similar programs for residents of their state. Some examples of these are:
– Florida: The Florida Housing Finance Corporation runs several affordable housing programs, foreclosure assistance and other related programs.
– New York: Programs and assistance are available through the New York Foundation for Senior Citizens, New York City’s Senior Affordable Rental Housing and New York State’s Affordable Housing Corporation.
– California: Various affordable housing assistance and programs are available through the state’s Department of Social Services. Also, many of the individual local governments (cities and counties) have affordable housing for seniors programs.