source:
  type: guide
  id: hud-4000-1-ii-e-payment-plan
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part II — e. Payment
    Plan (04/29/2024)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part II — e. Payment
    Plan (04/29/2024).
  coverage_tier: operative
obligations:
- id: hud-4000-1-ii-e-payment-plan-full
  canonical_id: hud-4000-1-ii-e-payment-plan-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part II — e. Payment
    Plan (04/29/2024)
  type: do
  tags:
  - regulator-direct
  - fha
  - hud-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: FHA Single Family Housing Policy Handbook 4000.1, Part II — e. Payment
      Plan (04/29/2024)
    source_class: hud-handbook
    source_url: https://www.hud.gov/hud-partners/single-family-handbook-4000-1
    snapshot_id: 8c03836f77f317e1
    fetched_at: '2026-05-23T00:28:40Z'
    content_hash: sha256:411430f29b13f9b54a2ebb0e6f6e7087ecd2b90d0da22eb0c8c792eaa2d7d0df
    paragraph_quote: 'e. Payment Plan (04/29/2024) i. Definition Payment Plan Option
      refers to the manner that HECM proceeds are disbursed to the Borrower. ii. Standard
      The Borrower may choose from among six different payment plans on how HECM proceeds
      are to be disbursed. The Mortgagee is prohibited from requiring, as a condition
      of the HECM, that any payments or draws exceed a minimum amount. For adjustable
      rate HECMs, the Borrower may change payment plans to one of the other available
      payment options at any time, provided funds are available. (A) Single Lump Sum
      Payment Option The single lump sum payment option is only available for fixed
      rate HECMs. The Borrower is limited to a single Disbursement at closing with
      no opportunity for future Disbursements to or on behalf of the Borrower, except
      as allowed from a Set-Aside established at closing. (B) Tenure Payment Option
      The tenure payment option is available for adjustable rate HECMs. The Borrower
      receives fixed monthly payments so long as the HECM is not prepaid in full or
      becomes Due and Payable, or the payments do not exceed any maximum mortgage
      amount stated in the security instrument or would otherwise exceed the amount
      secured by the first HECM lien. (C) Term Payment Option The term payment option
      is available for adjustable rate HECMs. The Borrower receives equal monthly
      payments for a term of months selected by the Borrower. (D) Line of Credit Payment
      Option The line of credit payment option is available for adjustable rate HECMs.
      The Borrower receives unscheduled payments at times and in amounts of the Borrower’s
      choosing. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured
      Housing Programs Reverse Mortgages 3. Allowable Mortgage Parameters Handbook
      4000.1 596 Last Revised: 11/26/2025 (E) Modified Tenure Payment Option The modified
      tenure payment option is available for adjustable rate HECMs. The Borrower must
      set aside a portion of the Principal Limit as a line of credit from which to
      draw at times and in amounts of their choosing, and receives the rest in equal
      monthly payments. (F) Modified Term Payment Option The modified term payment
      option is available for adjustable rate HECMs. The Borrower must set aside a
      portion of the Principal Limit as a line of credit from which to draw at times
      and in amounts of their choosing, and receives the rest in equal monthly payments
      for a term of months selected by the Borrower.'
  judgment: false
