By JOHN THOMPSON
jthompson@thecitizennews.com

A little-known mortgage process is helping free up hundreds of dollars of monthly cash for senior citizens.

Dubbed a “reverse mortgage,” the process provides an extra monthly stipend for seniors who have a tight budget and could use a few more dollars.

The Federal Housing Administration program allows seniors 62 and older to borrow against equity in their homes and have it distributed as either a lump sum, monthly payments or a line of credit.

The best part of the loan is that seniors don't have to repay it as long as they live in the home.

Seniors who have tried the program have used the extra income for everything from paying property taxes to paying for medicine or just using it as discretionary income.

Jeffrey Moulton of Norwest Mortgage said the program is proving to be extremely popular.

“The majority of those who are seeking this program so far have indicated that paying property taxes each year is a major consideration to look into the program,” he said.

Here are the most commonly asked questions about the program:

” Am I qualified for a reverse mortgage if I currently have an existing loan on my home.

Yes, but the existing loan must be paid off prior to or at the settlement of the reverse mortgage. Quite often the reverse mortgage is used to refinance an existing loan.

My property is held in a living trust. Do I qualify? Yes, but you must be the primary trustee and qualified by age.

To avoid probate, my children and I own the property in joint tenancy. Do we qualify?

Yes, if the children are age 62 and older and live in the property. Otherwise, they would need to be taken off title for you to participate.

Are the cash advances considered income by the IRS?

No. The cash advances are actually loan distributions and are not considered income. The cash advances are tax-free.

Are mobile homes eligible?

No. Unfortunately not, even if it is on a permanent foundation.

Are there restrictions on how I can use the money?

No. Of course not. After all, it's your money.

Are there restrictions on how is the loan repaid?

The loan is due and payable when the borrowers no longer occupy the property as their principal residence or fail to comply with the loan agreement.

The loan agreement states that the borrower understands it is his responsibility to maintain the property and to pay the real estate taxes and hazard insurance premiums.

The loan must be repaid in one payment, either from the sale of the home or through other resources.

There is no requirement that the property be sold, only that the loan is repaid.

For information, check with your financial institution or go to www.reversemortgages.net on the Internet.