www.hudclips.org 


U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON, D. C. 20410-8000

December 22, 1988
OFFICE OF THE ASSISTANT SECRETARY FOR
HOUSING-FEDERAL HOUSING COMMISSIONER
Mortgagee Letter 88-38
TO: ALL APPROVED MORTGAGEES
SUBJECT:  Home Equity Conversion Mortgage Insurance Demonstration-
               Procedures for Applying for Reservations of Insurance
               Authority.
 
        Under the Home Equity Conversion Mortgage Insurance
Demonstration, authorized by the Housing and Community Development
Act of 1987, HUD will insure up to 2,500 reverse mortgages on the
homes of elderly homeowners, enabling them to turn their equity into
cash.  A proposed rule for the demonstration was published in the
Federal Register on October 25, 1988.  In the proposed rule, HUD
announced its intention to invite lenders to apply for reservations
of insurance authority prior to publication of the final rule, so
that it could train HUD-approved counseling agencies about reverse
mortgages and their alternatives in those areas where lenders plan to
originate mortgages.
 
        The purpose of this letter is to inform you that HUD intends
to publish a notice in the Federal Register in January 1989 inviting
lenders to apply to their HUD Regional Office for 50 unit
reservations of insurance authority.  HUD-approved supervised and
non-supervised lenders and loan correspondents are eligible to apply.
Reservations will be allocated through a random drawing for those
lenders that apply within 30 calendar days from the publication of
the notice in the Federal Register.
 
        Lenders can receive a copy of the proposed rule and ensure
receipt of the notice by calling HUD User (1-800-245-2691) and having
their names placed on the mailing list for this program.  All lenders
on the HUD User mailing list will receive a copy of the notice when
it is published.
 
        If you have any questions about this letter, please call Judy
May, Office of Economic Affairs, at (202) 755-5426, or the Single
Family Development Division, Programs and Procedures Branch, at (202)
755-5676.
 
                Sincerely yours,
                Thomas T. Demery
                Assistant Secretary