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Standard vs. Saver Loans

HECM Standard and Saver loans both offer cash payments that allow you to live off the equity in your home. What’s the difference between these two options?

  1. HECM Standard loans have higher upfront fees than HECM Saver loans do.
  2. The HECM Standard and Saver have different eligibility requirements.
  3. HECM Standard loans are easier to obtain than HECM Saver loans.

“A” is correct. A HECM Saver allows you to keep more of the equity in your home, because it requires a substantially lower initial mortgage insurance premium than a HECM Standard (1% vs. 2% of the FHA maximum claim amount). The total amount of money you can borrow on a HECM Saver is also generally less than what you can obtain using a HECM Standard.