Under the National Housing Act, a borrower has the statutory right to select his or her interest rate (fixed or adjustable) at the time the reverse mortgage is originated under the Home Equity Conversion Mortgage (HECM) program.
Where a borrower selects a fixed interest rate, the borrower will receive a Single Disbursement Lump Sum payment option at loan closing, with no future draws available to the borrower.
Where a borrower selects an adjustable interest rate, the borrower will be permitted to choose from the following payment options:
•Line of Credit
•Modified Term, or
For more information see ML 14-10 available at https://www.hud.gov/program_offices/administration/hudclips/letters/mortgagee