Can borrowers change a Single Disbursement Lump Sum payment option to another HECM payment plan?

No. When a borrower selects the Home Equity Conversion Mortgage (HECM) Single Disbursement Lump Sum payment option, he/she cannot change to another payment plan option after loan closing because the amount of available funds is zero.

For more information see Mortgagee Letter 14-11 at https://www.hud.gov/program_offices/administration/hudclips/letters/mortgagee


All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.


Topic Number: KA-04304