Changing Law Never Applied to Timeshare Condos or Timeshare Resales Anyway

Are you familiar with the concept of the reverse mortgage? A reverse mortgage or reverse equity mortgage is a financial instrument through which senior citizens (age 62 and over) can create an ongoing cash flow tied to the equity in their home. In simplified terms, homeowners who have reverse mortgages receive a lump sum payment followed by periodic payments (typically monthly) or a credit line from the holder of their reverse mortgage. Reverse mortgages are somewhat like home equity loans, except that no repayment of the loan is required until the property is sold or the homeowner dies. At that point, the loan plus interest is then repaid.

But from time to time the question comes up about using a reverse mortgage for a timeshare condo. Despite the fact that reverse mortgage have been available for condo owners and for co-op owners, they have never been available for owners of timeshare condos. Timeshare condo owners, no matter how many weeks of timeshare they own, cannot utilize reverse mortgages.

While the laws are changing regarding reverse mortgages and condo ownership, don’t expect any change on the matter of timeshare condos. With the changes, most condominium owners who want to obtain an FHA-insured reverse mortgage must apply for the loan and receive a counseling certificate prior to a designated cut-off date of October 1 of this year. Yes, there will still be reverse mortgages available to condo owners after that date, but most of the condos that had been previously certified to qualify for these mortgages will have to be re-qualified, and none of them now or after requalification will be timeshare condos.