Fannie Mae Home Keeper Loan

Fannie Mae is a private-sector organization with a public charter to encourage homeownership in America. It does this by participating in the secondary mortgage market; that is, they buy mortgages from originating lenders in order to allow them to make more loans than they would otherwise be able to make. Fannie Mae buys several types of mortgages, including HECM mortgages from originators, and then issues securities, backed by the mortgages it acquires, that can be bought and sold by investors.

As part of its charter to encourage home ownership, Fannie Mae also has a reverse mortgage program, called the Fannie Mae Home Keeper. Fannie Mae does not make the loans directly, but through approved lenders, who then re-sell the mortgages to Fannie Mae. Like the HECM loan, the amount of money you can get from a Fannie Mae Home Keeper loan depends on the age of the borrower and the value of the house. The amount is calculated against the value of the house, or $333,700, whichever is less, regardless of geographic location. Depending on where you live, you may be able to borrow more from a Fannie Mae lender than with a HECM lender.

Borrowers can receive their funds either through a tenure plan, which provides you with monthly payments for as long as you live in the house, through a line of credit, or a combination. Unlike the HECM line of credit, the Fannie Mae line of credit does not grow over time. The Fannie Mae loan is due when the borrower dies, moves away or sells the home.

You may qualify for a higher monthly payment through Fannie Mae’s Equity Share option, which charges a fee of 10 percent of the home’s value, due at maturity. You do not have to pay the 10 percent when you take the loan. However, the 10 percent fee is waived if the loan is paid off or matures within two years.