Fresno Reverse Mortgages and Home Loans

A lot of Fresno homeowners have done exactly what they were supposed to do. They bought a home, paid it down for decades, and now own most or all of it. The house is worth something. The monthly budget, not always.

That's the gap a reverse mortgage was built for. But in California, a couple of state programs and rules sit right next to it, and one of them doesn't play well with a reverse mortgage at all. So before we talk loans, let's talk about what the state already offers you.

The short version

• We help with reverse mortgages and regular home loans for Fresno homes, through our California loan officers.
• Reverse options include the HECM, the HECM for Purchase, and proprietary (jumbo) programs. Finance of America's HomeSafe Standard, one of the programs we compare, is approved in California.
• Prop 13 stays with you. A reverse mortgage is a loan, not a sale, so it doesn't trigger a reassessment.
• California's Property Tax Postponement program and a reverse mortgage don't mix. You can't have both, and getting a reverse mortgage makes any postponed taxes due.
• California makes you wait 7 days after counseling before a reverse mortgage application is final.

Reverse mortgages for Fresno homeowners

The HECM

The HECM is the FHA-insured reverse mortgage, and it's what most people get. You must be 62 or older, live in the home as your primary residence, and have enough equity. You can take a line of credit, monthly payments, a lump sum, or a mix.

There are no required monthly mortgage payments. You must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms.

If you still have a mortgage, the HECM pays it off at closing. That's often the whole point: the payment goes away, and you keep living in the home. See How a Reverse Mortgage Works.

The HECM for Purchase

The HECM for Purchase lets you buy your next home with a down payment and a reverse mortgage together, with no required monthly mortgage payment afterward. You must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms.

People use it to trade a two-story house for a single-story one, to move closer to the kids, or to trade a big yard for a small one. In California, it pairs nicely with Prop 19, which I'll get to in a minute.

Proprietary (jumbo) reverse mortgages

If your home is worth more than the HECM limit, or your condo isn't FHA-approved, a jumbo reverse mortgage may be worth a look. We compare programs including Mutual of Omaha Secure Equity, Finance of America HomeSafe, Longbridge Platinum, Smartfi Choice, Nationwide Equities EquityPower, and MCM Holdings MCM Edge, and availability varies by state. HomeSafe Standard is approved in California. See Lending Limits for the current HECM limit.

California's Property Tax Postponement program, and why it matters here

This is the one people don't know about, so read this part twice.

California's State Controller runs a Property Tax Postponement program. For homeowners who meet its rules, the state pays your property taxes for you and puts a lien on your home, and you pay it back later, with interest, when you sell, move, or pass away. To qualify, you generally must:

• Be 62 or older, or blind, or disabled.
• Have household income under the program's limit.
• Have at least 40 percent equity in the home.
• Live in the home as your primary residence.
• Not have a reverse mortgage on the property.

That last line matters. You can't be in the program with a reverse mortgage, and if you're already in the program and later get a reverse mortgage, the taxes the state postponed for you become due. In practice, that usually means the postponed balance gets paid off at closing, out of the reverse mortgage.

So which is better?

It depends on what you're solving.

• If your only problem is the property tax bill, and you meet the program's rules, postponement may be the cheaper fix. Funding is limited and first come, first served, so it's not a sure thing.
• If you also have a mortgage payment, other bills, or want a safety net, a reverse mortgage solves more of the problem. It just replaces postponement, rather than sitting next to it.

I'm happy to lay both out side by side. If postponement is the better answer for you, I'll tell you so. Learn more from the State Controller's Property Tax Postponement page.

Prop 13 and Prop 19

Prop 13

Under Prop 13, your home's assessed value is set when you buy it and can generally rise by no more than 2 percent a year. If you've owned your Fresno home for a long time, your tax bill may be well below what a new buyer would pay.

A reverse mortgage is a loan, not a change in ownership. You keep the title, so your Prop 13 base stays put.

Prop 19 for owners 55 and older

If you're 55 or older and sell your primary residence, Prop 19 lets you transfer its taxable value to a replacement home anywhere in California:

• Up to three times in your life.
• The replacement must be bought or built within two years of the sale.
• If the new home costs more than the old one sold for, the difference is added to your transferred value.
• You file with the assessor in the county where the new home is.

That "anywhere in California" part is what makes it useful. A homeowner selling in the Bay Area or Southern California can carry a lower tax base to a home in the Valley, and a Fresno homeowner can carry theirs closer to family elsewhere in the state.

Prop 19 plus a HECM for Purchase

Here's the combination I like for the right person: sell the current home, keep the low tax base with Prop 19, and use a HECM for Purchase for the next one. Lower property taxes and no required monthly mortgage payment. You must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms. Talk with the assessor and your tax professional about your own situation. It's a conversation for your CPA, too.

California's 7-day counseling wait

Before any HECM, you meet with an independent, HUD-approved counselor. California adds its own rule: a lender can't accept your final, complete reverse mortgage application, or charge you fees, until 7 days after counseling. So the 8th day is the earliest.

California law also bars a lender from requiring you to buy an annuity to get a reverse mortgage. Read Why do I need to wait 7 days after counseling? and Reverse Mortgage Counseling.

My advice: do counseling early. It costs you nothing to have the certificate in hand while you think.

Insurance in California

With any reverse mortgage, you must keep homeowners insurance in force. In parts of California, finding a policy has gotten harder, and some homeowners end up with the California FAIR Plan, the state's insurer of last resort, often paired with a second policy, called a difference-in-conditions policy, to fill the gaps. The lenders we work with accept that FAIR Plan and difference-in-conditions combination.

If that's you, tell me early. Lenders have their own requirements for what coverage counts, and I'd rather sort it out before an appraisal than after. Your insurance premium is also part of the financial assessment.

Home loans for Fresno buyers and owners

We also help with:

• Buying a home and seeing your buying power before you shop.
• Refinancing.
• Home equity loans and HELOCs.
• FHA loans, conventional loans, and USDA loans.
• VA loans for eligible veterans and service members.

Request a rate quote for your numbers.

How we work with Fresno clients

1. A conversation by phone or video about your goals, your taxes, and whether postponement or a reverse mortgage fits better.
2. Counseling with an independent, HUD-approved counselor, then the 7-day wait.
3. Application and appraisal. An FHA appraiser visits the home.
4. Signing usually at home with a mobile notary.

Bring your family into any of these steps. I like it when more people understand the plan.

Fresno resources

• Fresno-Madera Area Agency on Aging, listed on the California Department of Aging's Fresno County page
• California State Controller: Property Tax Postponement
• California State Board of Equalization: Prop 19
• HUD-approved housing counselors: hud.gov/counseling or (800) 569-4287

Common questions

Can I be in California's Property Tax Postponement program and have a reverse mortgage?

No. The program requires that the property not have a reverse mortgage, and getting one later makes the postponed taxes due.

Will a reverse mortgage reassess my property taxes?

No. It's a loan, not a change in ownership, so your Prop 13 base stays the same.

Can I use Prop 19 and a HECM for Purchase together?

Often, yes, if you're 55 or older for Prop 19 and 62 or older for the HECM, and you meet each program's rules.

Do I have to go somewhere for counseling?

No. Counseling is usually done by phone or video. In California, the 7-day wait starts once you finish.

What if I can only get FAIR Plan insurance?

That's fine. The lenders we work with accept a FAIR Plan policy paired with a difference-in-conditions policy. Tell your loan officer up front so we can make sure the coverage amounts meet the lender's requirements before you spend money on an appraisal.

Next step

Get My Estimate, find a loan officer for California, or call us at 530-888-6000. See our California page and the full guide to Reverse Mortgages.

Sources

• California State Controller's Office, Property Tax Postponement Fact Sheet: sco.ca.gov
• California State Board of Equalization, Introduction to Prop 19: boe.ca.gov
• California Civil Code section 1923.2: justia.com
• California Department of Aging, Fresno County services: aging.ca.gov
• HUD, FHA Reverse Mortgage for Seniors (HECM): hud.gov