Recently proposed changes in FHA lending programs and guidelines could have drastic effects for 22 states (including Colorado) and the District of Columbia. The proposed reforms would restrict owners’ eligibility for Home Equity Conversion Mortgages (i.e., reverse mortgages) in states where community association liens are provided “super lien” status. If enacted, the revised rule states that “as a condition for a HECM to be eligible for loan assignment, that the HECM mortgage be in a lien status prior to homeowners association and condo association liens.” The result would be to eliminate associations’ current priority lien status over mortgages and deeds of trust and would effectively eliminate homeowners’ ability to obtain a reverse mortgage in super lien states. The proposed changes appear to be directly targeted at states with priority lien statutes. State super lien statutes provide important protections and benefits to owners, associations, and lenders. The propose rule changes are currently available for public comment.

If you are interested in commenting on rules that would eliminate reverse mortgages, you may comment through the Community Association Institute information on this topic.