Industry NewsInvesting

Reverse mortgage option helps homeowners keep it in the family

National Family Mortgage allows family members to ‘crowdfund’ HELOCs for their relatives

Crowdsourcing is not just for independent films or charity endeavors anymore. An online, peer-to-peer lending company is making headlines for a new reverse mortgage product that allows relatives to crowdfund home equity lines of credit, helping people arrange affordable loans, reducing tax issues, protecting relationships among relatives and keeping wealth within a family. Boston-based lender National Family Mortgage has launched Caregiver Mortgage, a secured home equity line of credit crowdfunded by the relatives of a homeowner. According to the company, the Caregiver Mortgage offers many of the features and benefits that attract borrowers to reverse mortgages, but without the costs and restrictions. A reverse mortgage is a home loan that provides cash payments based on home equity. Homeowners — in most cases, senior citizens and retirees — often defer payment of the loan until they sell the property, move or pass away. In the latter case, the homeowners’ heirs either g...