Great news for Florida residents!
Governor Ron DeSantis recently signed House Bill (HB) 7073 into law, effective July 1, 2024, which changes some requirements for reverse mortgages in Florida. One of the significant changes involves the “documentary stamp tax,” that applies to real estate documents, including mortgages.
Previously, if you took out a reverse mortgage on a property in the state of Florida, the documentary stamp tax was applied to the total mortgage lien amount, even if you couldn’t access that full amount. This often resulted in taxes being assessed on amounts significantly higher than the actual loan received. Now, the tax will only apply to the principal limit amount – the maximum amount you can actually receive from a reverse mortgage.
What does this mean for Florida residents?
This change means if you are looking to obtain a reverse mortgage in Florida, you won’t have to pay the documentary stamp tax on money you don’t have access to, potentially saving you a considerable amount in closing costs on a reverse mortgage.
Back in March, the National Reverse Mortgage Lenders Association (NRMLA) wrote a letter of support for the bill stating, “For far too long, Florida reverse mortgage borrowers have been forced to pay documentary stamp taxes on the stated mortgage amount rather than the principal limit. That is why this Bill is so critically important for Florida reverse mortgage borrowers.” Longbridge Financial is a proud supporter and member of NRMLA.
We hope this information is helpful and if you have any questions about how this new law might affect your reverse mortgage plans, please don’t hesitate to contact our team at your convenience.
