Discover the HECM for Purchase Loan
accurate as of
April 17, 2019
in Blog

Discover the HECM for Purchase Loan

HECM for Purchase

Seniors approaching retirement age sometimes consider selling their family home.  Whether it’s to downsize to a smaller home, move closer to grandchildren, or buy a home in the country or on the beach, making the decision can be stressful. If you are at least 62 years old, the Home Equity Conversion Mortgage (HECM) for Purchase loan may help you buy your next home without having monthly mortgage payments.1

The HECM for Purchase is a Federal Housing Administration (FHA) insured2 reverse mortgage that allows senior homeowners to use the equity from the sale of a previous residence to buy their next primary home in one transaction. Regardless of how long you plan to live in the home, or what happens to your home’s value, you only make one initial investment (down payment) towards the purchase.

Why Consider the Loan?

No matter what your needs may be, a HECM for Purchase loan may help:

  • Eliminate existing monthly mortgage payments1
  • Increase your purchasing power
  • Pay less up-front investment than a cash purchase
  • Right-size to a smaller, lower maintenance home
  • Buy a home closer to family or friends
  • Lower their cost of living during retirement
  • Enjoy carefree living in a senior housing community


  • Youngest borrower must be 62 years or older
  • Purchased home must be a primary residence occupied within 60 days of loan closing
  • Property must be a single family residence, an owner occupied 2-4 unit home, a condominium approved by the Department of Housing and Urban Development (HUD), or a manufactured home that meets FHA guidelines
  • The difference between the purchase price of the new home and the HECM loan proceeds must be paid in cash from qualifying sources such as the sale of prior residence, home buyer’s other assets or savings
  • Borrower must complete a HUD approved counseling session


Once you obtain your HECM loan, you must continue to meet the following conditions to maintain your loan in good standing:

  • Maintain your home according to FHA requirements3
  • Continue to pay property taxes and homeowners insurance
  • Continue to own and live in your home as your primary residence

Safeguards for Borrowers

  • Mortgage Insurance Premium (MIP) ensures the amount owed on the loan can never be more than the value of the home at time of sale2
  • Independent HUD counseling is required prior to loan application
  • Lender may only look to the value of the home for repayment; no other assets may be attached if the loan balance grows beyond the mortgaged home value (non-recourse loan)

While many people have heard of a reverse mortgage, many people do not know about the HECM for Purchase Program. Contact a licensed loan advisor today by calling us at (800) 976-6211 to find out if the HECM for Purchase Program is right for you.

Important Disclosures

1 Your current mortgage, if any, must be paid off using the proceeds from your HECM loan. You must still live in the home as your primary residence, continue to pay required property taxes, homeowners insurance, and maintain the home according to FHA requirements. Failure to meet these requirements can trigger a loan default that may result in foreclosure.

2 As required by the Federal Housing Administration (FHA), you will be charged an up-front mortgage insurance premium (MIP) at closing and, over the life of the loan, you will be charged an annual MIP based on the loan balance.

3 If your home needs repairs to be eligible for a HECM loan, you may be able to use the proceeds of the loan to accomplish this.