Modified Reverse Mortgage Program
A program designed to assist elderly homeowners with property taxes.
What is a reverse mortgage?
A reverse mortgage is one in which a lender makes a monthly payment to the homeowner. These amounts, plus accumulated interest, are backed by a mortgage on the property. The lender is repaid in full when the property is sold or exchanges hands.
What is the City's program?
The City's program is a modified reverse mortgage because the City makes the program available only to pay all or a portion of a homeowner's property taxes. No monthly payments for living expenses are allowed.
Is it expensive?
No, not compared to most other programs of this type. The City of Madison has worked to keep costs to a minimum. Charges include:
Will this loan affect my retirement pension, Social Security, Medicare benefits or eligibility in the Wisconsin Homestead Credit Program?
No, none of these will be affected by your loan.
What are the property qualifications?
What qualifications must the owner(s) of the property meet?
1 person . . . . . $45,100How much am I eligible to borrow?
You may borrow enough to pay all or a portion of your annual property taxes. The cumulative amount paid under this program, plus accrued interest and other loans secured by the property, cannot exceed 70 percent of the value of the property. The City Assessor's value will be used for this purpose.
How are my taxes paid?
At the time of closing on your loan, you will be required to sign a lien document. A lien on your property will then be recorded with the Dane County Register of Deeds. Upon filing of the lien, the Finance Department will draw a check payable to both the property owner and the City of Madison. You will then be responsible for paying the taxes in the City Treasurer's Office.
How is the loan repaid?
The loan is due when you leave your home or transfer the title. You may sell your home at any time with no penalty. At the time of sale, the City's lien on your property would be paid off and you would keep the remaining funds. Upon notification of a potential sale or transfer, the City would forward in writing the balance due under this program.
Are there any other requirements?
You, as the property owner, must agree to maintain sufficient fire/loss insurance to cover the replacement value of their home and to name the City of Madison as an additional payee for losses. A Certificate of Property Insurance listing the City of Madison as a lienholder must be submitted prior to signing the lien document.
Utilization of a reverse mortgage should be planned carefully and viewed as a matter of last resort. Equity in the home is being utilized to pay property taxes and interest does accrue. However, for people who have a debt-free home but are "cash poor," the program is beneficial.
Information for this program is available from the following organizations:
ContactAdditional information and/or an application form may be obtained from the City of Madison Finance Department. Please contact:
Randy WhiteheadFor information on Dane County's Home Loan Program - or HELP - similar to Madison's Modified Reverse Mortgage Program, please call the Dane County Controller's Office at (608) 266-4109.