We know Boomers are rethinking retirement housing along with every other aspect of aging, and that society is scrambling to innovate to meet their evolving needs. Yet for some people, even innovative concepts such as a collaborative senior co-housing village may be too tame.
Some adventuresome Boomers and those a shade ahead of them in years are choosing to take to the road: not simply to travel as “snowbirds” or full-time RV’ers enjoying the freedom of their golden years, but as purposefully engaged travelers seeking to give back in service. And when they do, a reverse mortgage may be exactly what fuels the dream — and ensures a welcoming nest for their return.
Consider 73-year-old Barbara Traynor. A single mother of three, Traynor retired from her administrative position in 2005 with little in the way of retirement savings. Burt she was driven to make a difference, literally. Her volunteer stints have included assisting at an Alaskan college, providing tourist information at a visitors’ center in Alabama, and working with families in Arkansas at Heifer Ranch, an educational center for the nonprofit Heifer International. She enjoys the cross-country travel she’s dreamed of, receives room and board as a volunteer, and often stays with friends she’s met over the years en route.
One popular organization welcoming adults of all faiths is NOMADS, a global ministry akin to Habitat for Humanity that helps people rebuild after natural disasters. Seniors volunteer their time and help, asking only for a place to park their RVs while they serve. Dan Brown, 65, and his wife Virgie have taken part in more than 20 service projects over the past five years.
Another resource for mobile volunteers of all ages is Volunteer.gov.
Boomers who are considering relocating and exploring other potential places to stay while on the road may want to bear in mind the tax benefits some states offer.
Regardless of how or where they choose to volunteer in retirement, one truth is steadfast: with a reverse mortgage in place, older adults in good health who yearn to both travel and give back without breaking the bank can live nomadically, help others, save money, see the country, and still have a wonderful home waiting for them when they take a well deserved break from their travels.
3 Comments
Just don’t be away from the home for more than six months at a time or you’ll trigger default!. Some servicers, I’m told by my clients require notification if the borrower is to be away more than 30 days….I haven’t verified this but I just tell them to ignore it.
Google defines a nomad as: “a member of a people having no permanent abode, and who travel from place to place … a person who does not stay long in the same place; a wanderer.”
I have also read about time share owning couple who live in their time shares 28 weeks out of the year excluding the time it takes to travel to the remote locations where their time shares are located. They also have a home where they live the rest of the year. The couple got a HECM to pay off their time share debt. Yet when the rule was pointed out to the author, promoting the idea, the author, an individual who works for a mortgage association, quickly did all he could to take the focus off of this transaction.
If a HECM borrower truly becomes a nomad, then the HECM collateral no longer meets the definition of a principal residence. If the borrower never intends on living in the home as their principal residence, how can they qualify for a HECM in the first place? The principal residence for HECM purposes has a very specific definition.
The latest definition of Principal Residence under the HECM program is found under Mortgagee Letter 2014-07 (also known as the Non-borrowing spouse ML) and issued under the authority of the Secretary to change the program under 12 USC 1715z-20(h)(3) states the following: “Principal Residence” is defined as the dwelling where the mortgagor and, if applicable, Non-Borrowing Spouse maintains his or her permanent place of
abode, and typically spends the majority of the calendar year. A person may have only one Principal Residence at any one time.” The rule generally has always been the same; see 24 CFR 206.39.
The legal use of HECMs for nomadic US seniors is yet another HECM myth being promoted by those who put cool ideas above legal requirements. Next we will be hearing the nonsense that nomadic seniors should consider buying a home in the community where they live the most but that still does not meet the HECM requirement unless the borrower will actually live in that home every year for more than 6 months out of the year.
Jim,
An excellent point about principal residence. While most of the nomadic seniors mentioned in the article go on short sojourns of several weeks to several months, it’s wise for all seniors who both have a HECM (or plan to apply for one) and also like to travel for extended periods to be aware of the ruling so that they do not end up in default.