While the details are still sketchy on how the various rules are going to be implemented, one of the larger changes is in how much cash the senior can put into their pocket at closing.
When the borrower owns their home free and clear, then the amount of cash draw at the initial closing will be limited to 50% of the max. loan size. For example a senior eligible for a $100,000 loan would be allowed to collect $50,000 at closing and the other $50,000 12 months later.
The exception to this would be in paying off a current mortgage. If for example the same above borrower had a $75,000 current mortgage that was being paid off, the senior could payoff the current mortgage receive $10,000 in cash at the time of closing.
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