Fannie Mae's Home Keeper

Fannie Mae's Home Keeper offers a viable alternative for reverse mortgage consumers, particularly those whose homes are worth more than the HECM, county-specific, limit but less than Home Keeper’s limit of $417,000.

Interest rates on Home Keeper work out to be higher than HECM although it is still a good deal for higher amounts. Currently, the rates are equal to the one month CD rate plus 3.4 with a lifetime cap of 12% over where the rates were when the loan was originated. These interest rates adjust every month, a feature typical of most reverse mortgages.

Generally, the closing costs on Home Keeper are less than HECM. This is due to the fact that the program does not charge an up-front mortgage insurance premium. All together, Home Keeper reverse mortgages will carry closing costs equal to roughly 3% of the value of the home with a monthly servicing fee of $25-$35. These costs can usually be rolled into the loan.

Individuals choosing a Fannie Mae Home Keeper reverse mortgage can choose from roughly the same disbursement options as HECM: lump sum, tenure payments, line of credit, or a combination. Unlike HECM however, the line of credit offered on Home Keeper will not grow over the years.

Home Keeper reverse mortgage can actually be used to purchase a home in addition to refinancing, a feature that is relatively unique. In this situation, it is advisable to work with a licensed real estate agent who is familiar with reverse mortgages.