The Rule on Farms and Reverse Mortgages
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In the June 13 Real Estate Q&A;, Robert Bruss gave an answer to a question about a reverse mortgage that needs clarification.
The question was whether or not a farm would qualify for a reverse mortgage. An income-producing property is not eligible for a reverse mortgage. The farm described in the question was clearly income-producing, so the answer given was correct.
However, both the FHA and Fannie Mae will do reverse mortgages in rural areas and on parcels up to five acres. More than five acres needs FHA approval. The acreage must be “normal and customary” for land parcels in the given area and, of course, may not be income-producing.
LINDA WHEELER
San Diego
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