FHA Single Family Housing Policy Handbook 4000.1, Part II — e. Payment Plan (04/29/2024)
FHA Single Family Housing Policy Handbook 4000.1, Part II — e. Payment Plan (04/29/2024).
Verbatim regulatory text
Verbatim provisions from FHA Single Family Housing Policy Handbook 4000.1, Part II — e. Payment Plan (04/29/2024) — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
FHA Single Family Housing Policy Handbook 4000.1, Part II — e. Payment Plan (04/29/2024)
e. Payment Plan (04/29/2024) i. Definition Payment Plan Option refers to the manner that HECM proceeds are disbursed to the Borrower. ii. Standard The Borrower may choose from among six different payment plans on how HECM proceeds are to be disbursed. The Mortgagee is prohibited from requiring, as a condition of the HECM, that any payments or draws exceed a minimum amount. For adjustable rate HECMs, the Borrower may change payment plans to one of the other available payment options at any time, provided funds are available. (A) Single Lump Sum Payment Option The single lump sum payment option is only available for fixed rate HECMs. The Borrower is limited to a single Disbursement at closing with no opportunity for future Disbursements to or on behalf of the Borrower, except as allowed from a Set-Aside established at closing. (B) Tenure Payment Option The tenure payment option is available for adjustable rate HECMs. The Borrower receives fixed monthly payments so long as the HECM is not prepaid in full or becomes Due and Payable, or the payments do not exceed any maximum mortgage amount stated in the security instrument or would otherwise exceed the amount secured by the first HECM lien. (C) Term Payment Option The term payment option is available for adjustable rate HECMs. The Borrower receives equal monthly payments for a term of months selected by the Borrower. (D) Line of Credit Payment Option The line of credit payment option is available for adjustable rate HECMs. The Borrower receives unscheduled payments at times and in amounts of the Borrower’s choosing. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages 3. Allowable Mortgage Parameters Handbook 4000.1 596 Last Revised: 11/26/2025 (E) Modified Tenure Payment Option The modified tenure payment option is available for adjustable rate HECMs. The Borrower must set aside a portion of the Principal Limit as a line of credit from which to draw at times and in amounts of their choosing, and receives the rest in equal monthly payments. (F) Modified Term Payment Option The modified term payment option is available for adjustable rate HECMs. The Borrower must set aside a portion of the Principal Limit as a line of credit from which to draw at times and in amounts of their choosing, and receives the rest in equal monthly payments for a term of months selected by the Borrower.