Finance of America Expands HomeSafe Second Reverse Mortgage

Finance of America (FOA) announced on Tuesday the expansion of its HomeSafe Second reverse mortgage product into Louisiana, Missouri, Rhode Island, and Washington, D.C. This expansion brings the total availability of the product to 18 states and the District of Columbia. The move addresses a growing trend among older homeowners seeking to access their home equity without refinancing existing low-interest rate mortgages or incurring the monthly payments associated with traditional home equity loans.

The HomeSafe Second product, which was reintroduced in 2023, is a second-lien reverse mortgage specifically designed for homeowners aged 55 and older. However, the minimum age requirement varies by state, being 60 in Washington and 62 in Texas. This product allows borrowers to access a portion of their home equity while maintaining their existing first mortgage. Crucially, borrowers are still obligated to meet ongoing loan requirements, including the payment of property taxes, homeowners insurance, and other property-related expenses, as well as maintaining the condition of their home.

Kristen Sieffert, president of Finance of America, stated that the company continues to observe strong demand for the HomeSafe Second product from both homeowners and loan officers. She highlighted that the product is particularly attractive to borrowers who wish to retain their current mortgage rates while simultaneously accessing their home equity. Sieffert emphasized that the expansion into additional states, coupled with FOA's technological approach, provides more homeowners with a practical solution to enhance their financial security during retirement. This is especially relevant for those with substantial home equity but limited options for accessing it without adding a monthly payment or relinquishing a favorable mortgage rate.

Finance of America attributes this expansion to the increasing interest in second-lien reverse mortgages. This surge in interest is occurring as housing wealth has appreciated in numerous markets, while retirees are simultaneously facing escalating costs for living expenses, insurance premiums, and property taxes. The company noted that homeowners in areas like Rhode Island and Washington, D.C., have experienced significant home price appreciation, potentially leading to a need for liquid assets. Similarly, retirees in states such as Missouri may also benefit from this product.