Which statement about an FHA reverse mortgage is NOT true?

The statement regarding reverse mortgages being a subordinate loan is not true in the context of FHA reverse mortgages. FHA reverse mortgages, specifically known as Home Equity Conversion Mortgages (HECM), are typically primary liens against the property. This means that they take precedence over any existing loans on the property. A reverse mortgage is designed to provide homeowners aged 62 and older with the ability to convert a portion of their home equity into loan proceeds, which are then disbursed without requiring the borrower to make monthly payments.

Regarding the other statements, they reflect the true requirements and characteristics of FHA reverse mortgages. The property must be owner-occupied, ensuring that the loan is secured against a primary residence rather than an investment or second home. Counseling with a HUD-approved counselor is mandatory, as it helps borrowers understand the implications of taking on a reverse mortgage. Finally, the structure of a reverse mortgage is such that the borrower is not required to make any payments during the loan term, which distinguishes it from traditional mortgages where monthly payments are standard.