Affordable Housing Options for NJ Seniors

NJ seniors

With the first wave of baby boomers turning 65 in 2011, the number of senior citizens in the United States is increasing. According to the US census, by 2030 the number of people 65+ will reach nearly 71.5 million. Most seniors live on fixed incomes and sometimes retirement savings or programs like Social Security can’t support their housing expenses. Because many of these senior citizens will need affordable housing options, the U.S. Department of Housing and Urban Development (HUD) has been increasing their initiatives to help seniors manage their cost of living in retirement.

 

Reverse mortgages are an increasingly popular option for seniors who still have equity in their current home and are looking to supplement their retirement income. If you are 62+ and have paid off your mortgage or paid off a significant amount of the loan, you may be eligible for a reverse mortgage. Under a reverse mortgage, instead of making monthly payments to the lender, the lender actually makes payments to the borrower. The borrower must still make regular payments on property taxes and homeowners insurance. This allows retirees to use the wealth they have accumulated in their homes to help cover their cost of living.

 

There are, however, a lot of reverse mortgage scams to watch out for. Some companies will outright lie to sell their services to unsuspecting and desperate seniors. The only reverse mortgage insured by the U.S. Federal Government is the Home Equity Conversion Mortgage (HECM). Through the HECM program, you will be able to withdraw some of your home’s equity. The amount available for withdrawal will vary from person to person and depends on the age of the youngest borrower, the current interest rate if your mortgage is not paid off, and the value of your home.

 

If you find it is impossible to stay in your current home, HUD also provides help for seniors looking to move into lower-income housing through senior housing vouchers, Section 202 supportive housing, and public housing.

 

The Housing Choice Voucher Program (HCVP) allows seniors to look for housing in the private sector amongst specific properties run by local public housing agencies including single-family homes, townhouses, and apartments. There are two kinds of vouchers: tenant-based vouchers, which move with the renter – and project-based vouchers, which are assigned to specific units and are not transferable. Typically, rent and utilities are calculated at 30% of the monthly adjusted gross income and the voucher will make up the difference in expenses. In order to find out if you or your loved one qualifies for this program, you will need to contact your local public housing agency.

 

Established in 1959, the Section 202 supportive housing program is the only HUD program specifically created to provide housing for seniors and those with disabilities. This program is designed to help seniors live as independently as possible while also offering assistance with daily living. Assistance can include dressing, bathing, housekeeping, and transportation. In this program, HUD provides loans to private and nonprofit organizations to finance the building and management of supportive housing services along with rent subsidies for residents. Typically, seniors that are 62 or older and have a very low household income (the average yearly income for Section 202 residents is $10,000/year) are eligible for this program. To apply, you will need to contact the individual housing community you are interested in.

 

Public housing for seniors includes high-rise apartments and duplexes that are operated by the local public housing agency. In this program, seniors will typically spend about 30% of their household income for rent and utilities. It is important to note that due to the limited resources available to HUD and local housing associations, there are typically long waiting lists for public housing. That is why is it important to be proactive and get in touch with your local public housing agency in order to determine your eligibility and explore all of your housing options.

 

Veitengruber Law is ready to offer expert advise on housing solutions for NJ seniors. Our goal is for you or your loved one to age in comfort and security. If you are looking for housing options for yourself or an aging parent or relative, it is important to know what resources are right for you. Call us today for your free consultation.

Reverse Mortgage Foreclosures: Can They Be Stopped?

nj reverse mortgage

What are reverse mortgages?

Reverse mortgages allow homeowners ages 62 and up to borrow against the equity of their primary residence to receive a loan in the form of either a revenue stream or a lump sum of money from their lender. In order to be eligible for a reverse mortgage, homeowners must first meet a few basic requirements.

The homeowner(s) have to be at least 62 years old and either own their home outright or have a very strong equity built up and owe very little on their mortgage. They must also occupy their home as their primary residence and hold the title to their home. While they typically get a bad rap, reverse mortgages oftentimes provide senior citizens with a valuable and much-needed source of funding to assist with a wide variety of needs that can occur with aging.

Some common reasons seniors seek reverse mortgages are to:

  • Finance a child’s college education
  • Pay for necessary medical expenses and bills
  • Fund home repairs and remodels
  • Supplement social security income to maintain an adequate standard of living throughout retirement.

It is worth noting that while the homeowner gets to remain living in their home and keep the title to the home as collateral, they are still required to pay all necessary taxes, property maintenance and repair costs, homeowner’s insurance payments, and interest and fees on their loan.

What happens if circumstances change?

While reverse mortgages can be a feasible and even financially sound option for certain people, there are some potential pitfalls to take into consideration before ever opting for a reverse mortgage in the first place. It is important to understand the specifics of what you are undertaking as a homeowner. For instance, a reverse mortgage is immediately owed back to the lender upon the occurrence of any of the following circumstances:

  • The borrower(s) decide to transfer the title or sell the home and succeed in doing so.
  • The borrower(s) reside elsewhere for over a year, thereby relinquishing the primary residence status of the home in the eyes of the lender.
  • The borrower(s) fail to meet the terms and conditions of the mortgage; for instance falling delinquent in homeowner’s dues or property taxes, or allowing the condition of the property to substantially deteriorate.
  • The borrower(s) pass away.

If in the near future you are considering moving, living away from your home for more than a year, or if you currently have a terminal illness, you may want to look into alternatives to a reverse mortgage so that you do not leave your loved ones in a bad financial situation upon your departure.

IMPORTANT NOTE: Once the reverse mortgage becomes due for any of the aforementioned reasons, the homeowner(s) (or their heirs) are legally liable to pay back the lender in full, including any applicable taxes and fees.

Can a reverse mortgage foreclosure really be stopped?

If you find yourself or your loved ones on the verge of a reverse mortgage foreclosure, you are not entirely without viable options. Contact a NJ real estate lawyer or foreclosure defense attorney who can help determine if you are eligible for a reputable loan modification on the reverse mortgage. There is also the option of selling the property yourself or allowing a relative or friend to pay off the remaining balance owed on your reverse mortgage.

A real estate attorney with experience in NJ reverse mortgage foreclosures will be best equipped to help answer any questions you may have and help you weigh the pros and cons of all your options. They will walk you through every step of the decision-making process with the end goal of ultimately helping you avoid a reverse mortgage foreclosure.