With the children grown and busy careers behind them, Audrey and Joe Vizzard of Scotts Valley, California, found themselves living in a house that, as Audrey says, "had outgrown us." But they weren't ready for an apartment or a retirement home. "We wanted to age in place," says Joe. A friend with similar concerns suggested a solution that struck them as just right: move to a beautifully maintained mobile-home park nearby that was gradually upgrading by bringing in manufactured homes. Joe and Audrey worked out a game plan that netted them not only a perfect-fit house, but also a strong sense of security and community.

Before they retired, both Joe and Audrey were medical professionals who worked with older patients. Joe was a rehabilitation physician, and Audrey was a clinical psychologist. Helping others deal with the problems and issues of aging spurred the couple to develop their own retirement plan. A primary strategy was selling their too-large home and adapting to a life with fewer possessions. "When we got ready to sell we started giving away all the furniture, except for a few sentimental pieces," says Joe. "We gave some things to our children, as long as they were willing to cart them away, and the rest went to various charities."

"We haven't missed any of it," adds Audrey, "and we feel so much freer without it."

An overall financial strategy was another key part of the process. Both Joe and Audrey participated in retirement investment programs while they were employed full-time. These funds and Social Security payments provide them with a comfortable monthly income.

Another income source was their big house, which they put on the market during a peak in local real estate prices. "We got eight offers at one time," says Audrey. Since the Vizzards had lived in the house more than 5 years, they would have been eligible for an income tax exclusion on the capital gains they realized from the property. However, because they reinvested all their equity in the new house, tax on their gains was deferred. (Current tax laws, enacted after the Vizzards sold their home, allow a $250,000 exclusion for a single homeowner and a $500,000 exclusion for a couple. To be eligible for the exclusion, homeowners need to have lived in their house for two of the previous five years.)

PUTTING EQUITY TO WORK

The equity from their 4,200-square-foot family home gave the Vizzards the financial leverage they needed to purchase exactly the kind of house they had pictured themselves living in during retirement. Part of those funds purchased a membership in the mobile home park, plus property-owners' shares--a plan that allows the occupants of the park to own the park's real estate jointly in exchange for a modest monthly rental fee. The partnership gives homeowners an extra measure of control over their monthly budget. For example, the owners determine the rents themselves by group ballot at regularly held meetings, thus avoiding arbitrary rent hikes that are common at other kinds of parks.

Because the park of their choice was full, Joe and Audrey had to purchase an existing mobile home within that park to obtain a home site. There was also another investment strategy at play when they bought the older mobile home. To make way for their new home, they donated the mobile home to the Homeless Coalition, a local nonprofit group that serves families in need of decent shelter. The coalition sold the home to a farmer in California's Central Valley for $8,000, and credited the Vizzards with a donation in that amount. The Vizzards were then able to declare that amount as a tax deduction.

The next step was to purchase and adapt a factory-built home that would fit on the site. Local code required either a mobile home or manufactured home, and the Vizzards decided a manufactured home best fit their needs. Manufactured homes are similar to conventional, site-built homes in terms of framing, insulation, wall thicknesses, and all finish materials, but they are often less expensive because factory production allows efficient use of materials and labor, resulting in cost savings that are often passed along to the home buyer. Like mobile homes, manufactured homes are purchased from local dealers, and can be delivered to the site fully assembled. In most regions of the country, state laws define and govern many aspects of the design and fabrication of manufactured homes. In California, for example, state law requires that manufactured homes be delivered fully equipped and ready to live in, complete with plumbing fixtures, cabinetry, and lighting. (Laws vary from state to state; check local housing authorities to see what is required in your area.)

MODEST CHANGES

Joe and Audrey shopped around for a manufacturer that was able to make modest changes in one of its stock plans before construction began. The plan they picked, offered by local dealer Claudia Caudle of California Homes and manufactured by Golden West Homes, had a floor plan of 1,740 square feet and cost $125,000. Before placing their order with the factory, Joe used architectural software on his computer to alter the basic design, using the overall dimensions of the stock plan as a guide. He widened doorways and corridors, moved walls, added a half-wall to define the front entry, rearranged the bathroom plumbing layouts, and added a serving counter in the kitchen.

All the plan changes were then made at the factory on the assembly line, thus saving carpentry costs when the house was delivered. The Vizzards paid a $1,500 fee for revising and re-engineering the stock plan. They hired Mike Sasso, a local contractor (and family Mend), during the design phase to act as construction consultant, facilitating communication between themselves and the factory's order department. He made sure that all plan changes were feasible and met code.

To increase livability and ensure the house would be easy to maintain, Joe and Audrey invested the remainder of their equity in a series of upgrades, including a direct-vent natural gas fireplace and a spacious deck that spans the front of the house. They also covered the factory subflooring with prefinished bamboo-plank flooring and installed upgraded fixtures in the kitchen, laundry, and bathrooms. For the exterior finish, Joe and Audrey selected low-upkeep hardboard siding and no-paint vinyl-frame windows--factory options.

Although their new place is nearly two-thirds smaller than the old one, it's open and airy with the living, dining, and kitchen areas merged into one large space. As previously noted, they widened passageways through the house. This improved accessibility, in keeping with universal design principles (see story, right). The changes came in handy when Joe had to go to the hospital for back surgery shortly after moving in. "When he came home," says Audrey, "he spent a couple days in a wheelchair, and we realized how well he designed the house to accommodate a more limited, routine."

THE PAYOFF

With no monthly mortgage payments or burdensome rent hikes to worry about, and with a house that practically takes care of itself, the Vizzards relish a newfound peace of mind. Just beyond their synthetic-wood, maintenance-free deck, a trail circles a small lake that adjoins the Vizzards' front lawn, providing them with pastoral vistas of the common areas, lawns, and trees that are maintained by the community. Having neighbors close by gives the Vizzards an extra sense of security and peace of mind.

"There's a general feeling here," says Audrey, "that we will all need a little extra help from time to time. This community is very supportive."

REVERSE MORTGAGES

HONE LOANS CONSTRUCTED SPECIFICALLY FOR SENIORS CONSERVE CASH AND PRESERVE OPTIONS

Nearly 15,000 senior homeowners chose to remain in their homes last year while enjoying more options for retirement, thanks to the Federal Housing Administration's Home Equity Conversion reverse mortgage program (HECM).

Called reverse mortgages because the flow of payments is reversed--payments are made from the lender to the homeowner--these federally insured loans allow homeowners age 62 and over to convert a portion of their home equity into cash that can be used for any purpose. The borrower retains title to the home, and there are no new monthly payments to be made to the lender. The funds are repaid, along with accrued interest, when the borrower permanently moves out and the home is sold.

Consumers interested in learning more about reverse mortgages can visit the Web site of the National Reverse Mortgage Lenders Association (NRMLA) at www.reversemortgage.org. Or, call 866/264-4466 to receive free consumer booklets.

UNIVERSAL DESIGN

DESIGNING WITH ACCESSIBILITY IN MIND PROVIDES AN IDEAL SCHEME FOR AGING COMFORTABLY AND SECURELY