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What Is a HECM for Purchase?
A HECM for Purchase allows homeowners age 62+ to combine a HECM with their own funds to purchase a new primary residence—all in one transaction.
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That can provide the flexibility to downsize, move closer to family, relocate for retirement, or simply choose a home that better fits the next chapter of life.
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​Key Benefits of HECM for Purchase Include:
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Home Purchase: Seniors can use the proceeds from their existing home's sale (or other financial resources) in combination with a HECM loan to purchase a new home. This means they can buy the new property without needing a traditional forward mortgage and monthly payments.
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No Monthly Mortgage Payments: One of the primary benefits of HECM for Purchase is that there are no monthly mortgage payments. Instead, the loan repayment (with accrued interest) is only due when the homeowner sells the home, moves out, or passes away.​
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How the Program Works
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​Eligibility: To qualify for an HECM for Purchase, at least one homebuyer must be at least 62 years old and meet other requirements set by the Housing and Urban Development Department (HUD).​
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Loan Terms: The loan amount depends on various factors, including the age of the youngest borrower, the appraised value of the new home, and current interest rates. The older the borrower, the more they may be eligible to borrow.
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Property Requirements: The purchased property must meet HUD guidelines, and it needs to be the buyer's primary residence.
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Repayment: When the homeowner sells the property or is no longer living in it, the reverse mortgage becomes due and payable. At that point, the proceeds from the sale are used to repay the loan, with any remaining equity going to the homeowner or their heirs.
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Financial Counseling: Potential HECM-for-Purchase borrowers are required to undergo financial counseling to ensure they fully understand the terms and implications of the reverse mortgage.
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