HECM for Purchase Reverse Mortgage

The Home Equity Conversion Mortgage for Purchase, commonly known as the HECM for Purchase loan (H4P), was first introduced as part of the Housing and Economic Recovery
Act (HERA) in 2008. It gave homeowners over the age of 62 the opportunity to buy a home with a reverse mortgage and have no monthly mortgage payments.


During the Economic Recession in 2008 many older homeowners, despite having plenty of equity, were stuck in a home that was too costly, and struggled to pay their mortgage and other bills, and many lost their homes for lack of cash flow.
BUT, let’s talk about right now – and how this might work for you! The HECM for Purchase loan might help you move from a home that is too costly or no longer meets
your needs. You could sell your home, use some or all of the cash proceeds and buy another home using a HECM for purchase reverse mortgage. You would no longer have
*monthly mortgage payments, which would allow you to keep more cash in your pocket and let you live the lifestyle you really want!

*You are still responsible to pay your taxes, insurance and other property charges on time.

How Do You Buy a Home with a HECM for Purchase Loan?

Meet these requirements:

  1. Minimum Age is 62
  2. Have cash available from approved sources – sale proceeds from current home,
    old 401k, gift funds, savings, etc.
  3. Receive a Counseling Certificate
  4. Buy a single family home, 2 – 4 units, approved condo or manufactured home

How Much Cash is Needed?:

All Reverse Mortgages are based on Age, Value of Property and Interest Rate for type of product chosen.

The chart below will give you an idea of approximately how much cash, including closing costs, you would need to buy a home up to a value of $625,500.

The HECM for Purchase loan is based on a maximum value of $625,500; so any amount over that would need to be in cash. (For example, a home valued at $700,000 would acquire an additional $125,500 besides the amount of cash required which is based on the age of the youngest borrower.)



Each column indicates the approximate cash needed to purchase a home with a HECM Reverse Mortgage; and taking into consideration the buyer’s age, purchase price and including closing costs figured at 5% of the purchase price. This chart is for illustration purposes only and your transaction would be unique to your specific circumstances. All terms, conditions, and restrictions are subject to change without notice. We advise that you consult your financial and/or legal advisor along with a Reverse Mortgage Specialist before using a HECM Reverse Mortgage to purchase your next home. THIS IS NOT A COMMITMENT TO LEND.