What does the acronym HECM stand for?

The acronym HECM stands for Home Equity Conversion Mortgage. This refers specifically to a type of reverse mortgage designed for homeowners aged 62 and older, allowing them to convert a portion of their home equity into loan proceeds. These funds can then be used for various purposes, such as covering living expenses, healthcare costs, or other financial needs, without the requirement of monthly mortgage payments.

Understanding the HECM is crucial for housing counselors, as it offers older adults a way to tap into their home equity while still living in their property. It is a federally insured program, providing protections and specific guidelines that ensure the borrower maintains ownership of their home. This knowledge is essential for counselors to effectively advise clients on the benefits and implications of utilizing their home equity in this way.