HECM for purchase

What Is a HECM for Purchase?

A HECM for Purchase is a reverse mortgage option that allows eligible homeowners age 62 and older to buy a new primary residence using a combination of their own funds and reverse mortgage proceeds.

For the right borrower, this can be a useful way to purchase a home that better fits retirement needs while avoiding a required monthly principal-and-interest mortgage payment.

With a HECM for Purchase, the borrower brings a required down payment based on factors such as age, home value, and loan terms, and the reverse mortgage provides the remaining eligible portion of the purchase financing.

This can allow a homeowner to move into a more suitable home without paying all cash and without taking on the same type of monthly mortgage payment obligation that comes with a traditional mortgage.

This option may be attractive for homeowners who want to:

• Downsize or move to a more manageable home
• Relocate closer to family, services, or medical care
• Move into a one-story or more accessible property
• Preserve more of their retirement assets instead of paying all cash
• Increase purchasing flexibility in retirement

Eligible properties may include:

• Single-family homes
• FHA-approved condominiums
• Townhomes or planned unit developments
• Certain owner-occupied two- to four-unit properties
• Some manufactured homes that meet program requirements

Property eligibility depends on program guidelines and lender review.

Although a HECM for Purchase does not generally require monthly principal-and-interest mortgage payments, the homeowner must still continue to meet the ongoing obligations of the loan.

These include:

• Living in the home as a primary residence
• Paying property taxes
• Maintaining homeowners insurance
• Keeping the home in good repair
• Paying any applicable HOA, condo, or related property charges

These responsibilities are an important part of the program and should be clearly understood before moving forward.

HECM for Purchase may be a good fit for homeowners age 62 and older who want a home that better fits their retirement lifestyle without tying up all of their cash in the purchase.

It may also appeal to buyers who want to improve convenience, reduce home maintenance demands, or preserve assets for future needs while still buying a home that meets their goals.

For the right borrower, a HECM for Purchase can be a valuable way to buy a more suitable home and create greater financial flexibility in retirement. At SoCal Reverse Mortgage, we help homeowners understand how the program works, what the requirements are, and whether it fits their plans.