HECM for Purchase is the FHA program that lets eligible borrowers 62 and older buy a primary residence with reverse mortgage proceeds plus a down payment — in one closing. HUD counseling, financial assessment, and mortgage insurance premiums apply.
HECM for Purchase combines two funding sources at closing: your down payment (from savings, sale of a prior home, or other eligible sources) and reverse mortgage proceeds that cover the rest of the purchase price up to FHA lending limits and program calculations based on age and expected interest rate.
The program is FHA-insured, which means upfront and annual mortgage insurance premiums (MIP) apply — similar to other HECMs. Borrowers must complete HUD-approved counseling before applying and pass a financial assessment confirming they can meet ongoing property charges: taxes, insurance, and maintenance.
The home must be your primary residence — not a second home or investment property. One closing handles both the purchase and the reverse mortgage lien. Ryan and Steve can walk through how proceeds, down payment, and closing costs typically break down for purchase scenarios.
Key elements of the HECM for Purchase process and how they differ from a standard HECM refinance.
Purchase HECMs require a substantial down payment because reverse proceeds only cover a portion of the price. The younger the borrower and higher the expected rate, the more cash is typically needed at closing.
Before application, borrowers complete a session with a HUD-approved counselor who explains program costs, heir obligations, alternatives like forward mortgages, and the non-recourse nature of FHA-insured HECMs.
Lenders evaluate credit history, income, and assets to determine whether you can sustain property charges over time. A Life Expectancy Set-Aside (LESA) may be required if the assessment shows potential difficulty paying taxes and insurance.
Upfront MIP is typically financed into the loan; annual MIP accrues over time. Insurance protects borrowers and lenders and enables non-recourse protections that limit heir liability to the home's value.
Typical steps in a HECM for Purchase transaction.
Step 1
Obtain your counseling certificate from a HUD-approved agency. This is required before the lender can process your application.
Step 2
Submit income, asset, and property documentation. Lender orders appraisal, title work, and runs the financial assessment.
Step 3
Based on youngest borrower age, expected rate, and home value, the lender determines how much reverse proceeds apply toward the purchase and how much down payment you need.
Step 4
Sign purchase and loan documents in one closing. Bring your down payment, pay closing costs, and take ownership of your new primary residence with no required monthly P&I while you live there.
Related guides to help you understand reverse mortgages and next steps.
Yes — age 62+, down payment, and no monthly P&I basics.
What drives proceeds — age, value, rates, and liens.
Counseling, financial assessment, and eligibility.
Ask Ryan & Steve about HECM for Purchase details.
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HECM for Purchase is an FHA-insured program that lets eligible borrowers 62 and older buy a primary residence using reverse mortgage proceeds combined with a down payment — all in one closing transaction. No required monthly principal and interest payments while you live in the home.
You bring cash or proceeds from a prior home sale as the down payment at closing. Reverse mortgage proceeds cover the remainder of the purchase price up to program limits. The exact split depends on your age, interest rates, and the home's value.
Yes. HUD-approved reverse mortgage counseling is mandatory before application. The counselor explains costs, obligations, alternatives, and how purchase HECMs differ from traditional mortgages.
No. Eligibility depends on age, property, financial assessment, and lender guidelines. This page is educational — not a commitment to lend or a guarantee of specific terms, proceeds, or closing costs.
Ryan & Steve can explain down payment, counseling, and closing steps — not a commitment to lend; subject to credit and property approval.