Overall, our Finance of America review revealed a company that stands out for its commitment to professionalism and customer service. With a typical closing time of 30 days, Finance of America Reverse has lump sum, tenure payment and line of credit options for borrowers. The majority of their loans are federally insured HECM reverse mortgages, although the company also has a jumbo loan option for individuals with larger loan requirements.
Whether you need a lump sum of cash, tenure payments, a line of credit or some combination of each, a reverse mortgage from Finance of America Reverse could be the right choice for you. In 2023, FAR merged with American Advisors Group as part of the company’s “strategy to create a retirement solutions platform that helps older homeowners achieve financial goals in retirement,” a news release said.
Most (95%) of Finance of America Reverse’s loans are FHA-Insured insured Home Equity Conversion Mortgages (HECM), meaning they have built-in protections for the borrower. From that perspective, Finance of America Reverse offers a product similar to its competition.
But what makes this company stand out from other reverse mortgage companies is its customer service.
Great Closing Speed
American Advisors Group (AAG)
Any HECM reverse mortgage requires borrowers to complete a compulsory consultation with a Housing and Urban Development (HUD) counselor. Nevertheless, a reverse mortgage can be difficult to understand. What we appreciate about Finance of America Reverse is their willingness to go above and beyond to make sure you understand the nuances of getting a reverse mortgage. Their licensed professionals have ample experience in their field and can talk with you through the process and answer any questions you might have.
Moreover, this is not a one-size-fits-all operation. The company will work with you to tailor your reverse mortgage to your specific needs. That means if you prefer to receive a significant portion of the funds upfront, they will work with you to structure a lump sum. If you prefer to supplement your retirement income with additional line of credit payments, they will work with you to that end. They can also create a hybrid approach, such as a lump sum with a line of credit. While there are federally required limitations to the distribution of your funds, the team will work with you to any extent possible to reach your retirement planning goals.
The HECM reverse mortgage product is the most popular reverse mortgage product on the market because of its FHA-Insured insured non-recourse feature. In simple language, that means neither the borrower nor the heirs will be personally liable to repay more than the home is worth at the time the loan is called due. Accordingly, HECM loans are the most popular reverse mortgage product at Finance of America Reverse. The company’s headquarters are in Tulsa, OK, but this product is available in all 50 states and in Puerto Rico. The HECM reverse mortgage is subject to a principal limit of $970,800, or the value of the home (whichever is less).
For borrowers that need a reverse mortgage product on a home beyond the HECM limit of $970,800, FAR offers a proprietary jumbo loan called the HomeSafe® reverse mortgage. This product often appeals to high-net-worth individuals and will allow borrowers to access loan amounts of up to $4 million. Technically the HomeSafe® product is also a home equity conversion mortgage (HECM), but for the purpose of this guide, HECM will refer only to the FHA product and not the HomeSafe® loan.
|Loan Value||Less than $970,800||$970,800 – $4M|
|Interest Rate Type(s)||Fixed or Variable||Fixed|
|Line of Credit||Optional||Yes|
Unlike the HECM product, Finance of America Reverse’s HomeSafe® product is not FHA-Insured insured, but remains a non-recourse loan. As a benefit, the borrower doesn’t have to pay mortgage insurance premiums, which makes the total cost of the loan smaller than it would if it included mortgage insurance premiums.
Closing speed at Finance of America is typically 30 days, but could take longer depending on the borrower and the underwriting process.
While the mortgage industry, in general, is moving toward the future with completely online applications and other mortgage services, Finance of America Reverse is more traditional than some lenders. For instance, they still rely on using mail for parts of the application process. As a good first step, it seems the company is trying to incorporate some technology to simplify the process by offering e-signings on specific documents.
Like other mortgages and reverse mortgages, there will be various costs for Finance of America Reverse borrowers. Closing costs will include origination fees and various other fees like title insurance or settlement fees.
As with all Lenders in the industry, Finance of America Reverse does charge closing costs, these costs are not always paid upfront or out of pocket by the borrower. In some cases, Lender credits are also given to lessen the amount of costs. Depending on your situation, you may be able to close the loan without any out-of-pocket fees. Mortgage insurance premiums will vary, depending on the value of the home. The other various fees (title insurance, etc.) are also commonly charged in the industry. All fees and charges for Reverse Mortgages are dependent on many variables of the loan.
Interest on the Finance of America Reverse mortgage can be either fixed rate or variable rate – depending on the borrower’s preferences. Your decision for interest type (fixed vs. variable rate) will have an impact on the timing and amount of the funds you receive. There are advantages and disadvantages to each option, so you should consult with your financial advisor or a loan officer at Finance of America Reverse for answers on which interest type is best for you.
While the loan is secured by the home, there are some general requirements for a reverse mortgage that apply at Finance of America Reverse. First, the borrower must be at least 62 years old. Second, they must own the home and use it a primary residence. While they do not have specific credit score requirements for borrowers, applicants need to pass a financial assessment in order to receive a loan. The financial assessment looks at credit history, property tax history, monthly residual income and other financial metrics as needed.
Reading reviews from Finance of America Customers on ConsumerAffairs, you’ll frequently see words like “knowledgeable” and “helpful,” even “fabulous.” The average rating for the company is 4.6/5.0 stars on a popular review site with more than 1,000 consumer reviews. Criticisms about the company from unhappy customers were about unexpected closing times or limits to the amount of reverse mortgage funds available.
Once you’ve decided to contact Finance of America Reverse about a reverse mortgage, there are five steps that will happen before you can finalize the reverse mortgage and gain access to funds. This process typically takes about 30 days:
After receiving your contact information, the company will contact you to assess your needs, your situation and answer your initial questions. If you are still interested in moving forward, they will prepare you for a federally-required independent counseling session.
A HUD (Housing and Urban Development) approved reverse mortgage counselor will contact you to make sure you understand all the aspects of a reverse mortgage. The session typically lasts 60-90 minutes and is conducted either over the phone or face to face. You will receive a certificate demonstrating that you have completed counseling. If you decide to proceed with the loan, you will move to the application phase.
A loan officer from Finance of America Reverse will contact you to begin the formal application. You will work to gather the required documents, which include tax returns, bank statements and identification and your reverse mortgage counseling certificate. A notary will come to your home to collect these documents and your signature.
A Finance of America Reverse mortgage specialist will work with a vendor to complete a home appraisal and review your application. An underwriter will review all the application materials and determine your eligibility for a loan.
If your application is approved, you will work again with a loan specialist to schedule a closing and complete the required paperwork. Once closing has taken place, you’ll have access to your funds.
Yes. You do need a home appraisal. This is part of the processing approval phase of the application process.
Yes. Finance of America Reverse can set aside part of your reverse mortgage for estimated property taxes and insurance premiums. Talk to your loan officer about the option if you think you’ll need assistance.
The company a registered mortgage company and is NMLS #2285. Finance of America Reverse is part of the National Reverse Mortgage Lenders Association, and is rated A+ by the Better Business Bureau.
NMLS Consumer Access has only three records related to Finance of America Reverse. One of the records was about the company filing a required report one day late in Oklahoma. The other two records were from 2012 and related to employees operating without proper licensure in Arkansas and Kentucky.
No. However, it may be best for you to list your spouse if he/she is eligible. Check out the tips for a wise buyer in our reverse mortgage buyers guide.
You will need some equity to be qualified, but there is no exact answer to this question. Contact a reverse mortgage advisor for a better estimate based on your situation.
Not necessarily. Finance of America will conduct a financial assessment to determine your eligibility for the reverse mortgage.
Yes – 62 or older. For FAR’s proprietary product, HomeSafe ®, the minimum age is 55, excluding Massachusetts, New York, and Washington, where the minimum age is 60, and North Carolina, Texas, and Utah, where the minimum age is 62
Considering the complexity of the reverse mortgage products on the market, it’s important to find a reverse mortgage lender that you can trust. Finance of America Reverse seems to set the standard for knowledge and customer service. If you are interested in one of Finance of America Reverse’s products you can call 844-587-3377 or use their online contact form.