Look­ing at three spe­cial sit­u­a­tions

Home - Santa Fe Real Estate Guide - - THEREVERSEMORTGAGE - JOHN RUYBALID

“Off-grid” homes, “shared wells,” and man­u­fac­tured homes all pose spe­cial is­sues with FHA-in­sured re­verse mort­gages. Let’s talk about liv­ing “off the grid.” Some prop­er­ties are not eas­ily reached by con­ven­tional elec­tric ser­vice. Un­til re­cently, FHA re­quired that houses with al­ter­na­tive sources of power, such as pho­to­voltaic or wind, also have a con­ven­tional source of heat to keep the house at a tem­per­a­ture of at least 50 de­grees. A lit­tle over a year ago, FHA re­laxed this re­quire­ment. I pro­vided a re­verse mort­gage to a Los Cer­ril­los prop­erty owner whose main power came from pho­to­voltaic pan­els, with bat­tery stor­age. There was propane for cook­ing, but not for heat. The ap­praiser was able to find com­pa­ra­ble sales that were also off-grid. Prior to this change in FHA’s guide­lines, this prop­erty would not have met FHA’s Min­i­mum Prop­erty Stan­dards.

An­other com­mon is­sue is the “shared well.” FHA has no prob­lem with an in­di­vid­ual well or pub­lic wa­ter, but when the ap­praiser says there is a “shared well,” there is an ad­di­tional set of re­quire­ments. The shared well can­not serve more than four prop­er­ties, it has to have a sep­a­rate shut-off valve at the well for each prop­erty, and it has to have a sep­a­rate source of power (and a sep­a­rate me­ter). FHA doesn’t al­low the power to come from one of the houses served by the well, be­cause if that per­son didn’t pay the elec­tric bill, all the prop­er­ties served by that well would lose their wa­ter. The shared well agree­ment also has to have spe­cific lan­guage re­quired by FHA. Talk to your re­verse mort­gage spe­cial­ist about the re­quired lan­guage.

Lastly, I want to talk about man­u­fac­tured homes. While be­com­ing a lit­tle more dif­fi­cult, FHA does al­low re­verse mort­gages on prop­er­ties with man­u­fac­tured homes. The home has to be a dou­ble-wide man­u­fac­tured af­ter June 15, 1976. That is when FHA man­dated a num­ber of safety re­quire­ments for man­u­fac­tured hous­ing. The HUD seal num­bers need to be vis­i­ble on the ex­te­rior of the home.

The man­u­fac­tured home has to be on a foun­da­tion that meets FHA guide­lines and has to be in­spected by a pro­fes­sional en­gi­neer. One of the re­quire­ments is that the perime­ter have con­crete at a depth of at least 18 inches. This is where the “skirt­ing” typ­i­cally touches the ground. Of­ten man­u­fac­tured home are on blocks on a slab or blocks on con­crete ribbons un­der the home. It is the lat­ter that usu­ally does not have the con­crete around the perime­ter. Suf­fi­cient tie-downs and vent­ing are also re­quired.

All of these guide­lines are avail­able at www.hud.gov. Search for HUD Guide­book 4930.3G.

John Ruybalid is a re­verse mort­gage spe­cial­ist with­Mort­gage Part­ners – Santa Fe. He has been orig­i­nat­ing res­i­den­tial mort­gages in Santa Fe since 1985. John may be reached at (505)690-1029. His web­site is www.nm­re­verse­mort­gage.com.

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