Elderly co-op owners, especially in New York City, have been pushing for the federal government to make them eligible for a reverse mortgage program for years.
The Department of Housing and Urban Development started drafting regulations a few years ago that would have expanded the Home Equity Conversion Mortgage program to include c0-ops. A HUD spokesperson said the agency opted not to make the change because the “F.H.A.’s single-family programs are based on loans being secured by real property and the co-op structure does not meet this basic requirement,” according to the New York Times.
The loan program covers single-family homes, multi-family homes with as many as four units, and HUD-approved condos. Eligible homeowners who are age 62 and up are able to withdraw some of their home equity.
Many elderly co-op owners in New York were hoping to use their equity for building maintenance, medical bills and various other expenses, the newspaper said.
Mary Ann Rothman, executive director of the Council of New York Cooperatives and Condominiums, told the Times the decision is “terribly, terribly distressing to us.” [NYT] — Mark Maurer