HECM for Purchase
The HECM for Purchase program allows seniors 62+ to use a reverse mortgage to buy a new primary residence while eliminating monthly mortgage payments.
What Is HECM for Purchase?
Instead of buying a home with a traditional mortgage, seniors use the HECM program to finance part of the purchase. The buyer makes a large down payment (typically 45%–55%) and the reverse mortgage covers the rest — no monthly mortgage payments required.
How It Works
- Eligibility: Must be 62+ and purchase a primary residence.
- Down Payment: 45%–55% depending on age, interest rates, and home value.
- Property Types: Single-family homes, FHA-approved condos, and some 2–4 unit homes.
- Credit Requirements: No minimum score, but borrower must prove ability to pay taxes, insurance, and HOA.
- Mandatory Counseling: Required through a HUD-approved counselor.
Benefits
- Buy a new home with no monthly mortgage payments.
- Perfect for downsizing or relocating in retirement.
- Keeps more cash in reserves compared to buying outright.
- FHA insurance protects heirs from owing more than home value.
Fun Facts & Insider Details
- Popular Among Retirees: Many use it to move closer to family or into retirement communities.
- Down Payment Comes First: Funds often come from home sale proceeds, retirement savings, or gifts.
- Not Limited by Income: Qualification is based on equity and age, not income.
Who Is the Best Candidate?
- Seniors 62+ looking to downsize or relocate.
- Retirees wanting to keep more cash in reserves.
- Homeowners wanting a new home with no monthly mortgage payments.
FAQs – HECM for Purchase
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Do I still own my home?
Yes, you retain ownership and title.
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Can I buy any property type?
No. It must be a primary residence and meet FHA guidelines.
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What happens when I pass away?
Heirs can sell, refinance, or turn the home over to the lender — but will never owe more than the home’s value.
Next Step
⚖️ Disclaimer: This guide is for educational purposes only. Loan approval and terms depend on credit, income, assets, property type, and program guidelines.
