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An After Tax Economic Analysis Of Home Equity Conversion For The Elderly, Lowell James Cramer
An After Tax Economic Analysis Of Home Equity Conversion For The Elderly, Lowell James Cramer
FIU Electronic Theses and Dissertations
The FHA program to insure reverse mortgages has brought additional attention to the use of home equity conversion to increase income to the elderly. Using simulation, this study compares the economic consequences of the FHA reverse mortgage with two alternative conversion vehicles: sale of a remainder interest and sale-leaseback. An FHA insured plan is devised for each vehicle, structured to represent fair substitutes for the FHA mortgage. In addition, the FHA mortgage is adjusted to allow for a 4 percent annual increase in distributions to the homeowner. The viability of each plan for the homeowner, the financial institution and the …