Keep That Farm in the Family With a Reverse Farm Mortgage

It is sometimes hard to keep your farm running profitably.  It may be costing you too much to keep the farm in top shape while at the same time try to make a profit. If the farm has been in your family for generations, you may not be willing to sell it even if you stand to make a profit.  Many farmers today are looking to find lenders for reverse farm mortgages to help them deal with this type of situation.

There are some specific requirements necessary in order to qualify for a reverse farm mortgage. They are basically the same as with any reverse mortgage, primary that the borrower is 62 years old or older and must be a property owner.  Once the reverse mortgage is obtained, the owner (borrower) is given funds in a lump sum or as monthly payments and he is not required to give up the property as long as he is still using or living in it. 

A reverse farm mortgage is a low-interest loan available only to senior citizens who own their own homes (farms).  The equity that has been built up in the home (farm) is used as collateral and the amount of the loan is a percentage of the home’s (farm’s) value.  This loan does not have to be repaid until the home or farm is vacated permanently by the owner or until the owner passes away.  The estate then has approximately 12 months to repay any balance remaining on the reverse mortgage or has the option of selling the home (farm) to pay off the balance. 

A farmer has several options to choose from when obtaining a reverse farm mortgage.  He can receive monthly payments, a lump sum payment or a combination of both when funds are distributed from the reverse mortgage.  Then, as with a regular reverse mortgage, the money received can be spent in any way the borrower chooses.   One option might be to purchase better farm equipment so that overall productivity on the farm will be increased. 
With a reverse mortgage a farmer has the funds he needs and doesn’t have to worry about losing his precious farmland.  He will be able to continue working on the farm and have additional income to use for increased farm productivity.

To be eligible for a HUD reverse mortgage, the Federal Housing Administration requires that all homeowners must have reached the age of 62.  They must own their own home (farm) or have at least paid off approximately half of the mortgage.  HUD requires no income or credit requires for a reverse mortgage.