HECM, Ed Szymanoski’s Legacy, at 30

William Reid
U.S. Department of Housing and Urban Development

Opinions expressed in this introduction are those of the author and do not necessarily reflect the views and policies of the U.S. Department of Housing and Urban Development or the U.S. government.

The Federal Housing Administration’s (FHA’s) Home Equity Conversion Mortgage (HECM) insurance program began as a “demonstration,” authorized by Congress with Section 417 of the Housing and Community Development Act of 1987, adding Section 255 to the National Housing Act. It authorized the Secretary of the U.S. Department of Housing and Urban Development (HUD) to insure 2,500 reverse mortgages through September 30, 1991, on the homes of elderly homeowners. The intent was to enable the elderly to continue living in their homes while turning a portion of their equity into cash to reduce the effect of economic hardship caused by the increasing costs of health, housing, and subsistence needs at a time of reduced income.