HECM for Purchase

The Home Equity Conversion Mortgage (HECM) is a reverse mortgage that has rapidly become part of the financial planning world. No longer considered a loan of last resort, the new and improved HECM could help those who may be on the lookout for a new home while utilizing their existing home equity. Considering that your home may be your largest asset, you owe it to yourself to learn more about the HECM.

Reduced out-of-pocket expenses. Greater home purchasing power.

If you (or your spouse) are at least 62 years old, you may be able to take advantage of a Home Equity Conversion Mortgage for Purchase, or H4P for short. The H4P allows you to:

  • purchase a new home with approximately 50% down*
  • MOVE into a home & location that better fits your needs
  • reduce your out-of-pocket expenses by not having a monthly mortgage payment**
  • RETAIN more of your life savings
  • KEEP the title to your home.

*See below for more information
** must maintain the property as a primary residence and keep property taxes, insurance, and HOA dues current

H4P Buyer Requirements:

  • You or your spouse must be at least 62 years old or older
  • You must intend to occupy the property as your primary residence. Vacation and rental homes are ineligible.
  • The money used for the down payment must come from your checking, savings, investments, gifts or an existing home sale. The down payment cannot be borrowed.
  • You must be able to maintain the home and pay property taxes plus insurance and HOA dues.
  • Financial assessment required

Eligible Properties:

  • Single-Family
  • HUD Approved Condos
  • Planned Unit Developments (PUD)
  • Two to four-unit property (one must be owner-occupied)
  • Manufactured Homes built after June 15, 1976 (must own land and be on a permanent foundation)
  • Property must be occupied within 60 days after the closing date

Down Payment

Down payment will vary based on the age of the youngest borrower, the current expected rate, and the appraised value of the home. The older the youngest borrower is the smaller the down payment. Please reach out to us for specific numbers. Max value of the home is capped by FHA at $765,600.

Not Allowed for Down Payment:

  • Seller financing and concessions
  • Cash from credit card
  • Bridge loan of any kind
  • Subordinate financing

Allowed Sources of Down Payment:

  • Sale of departure home
  • Sale of homebuyer’s other assets
  • Homebuyer savings
  • Gift money from parties not involved in the transaction

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