HECM for Purchase

You can use a HECM for Purchase reverse mortgage loan to buy your next home if:

• The youngest homeowner on title is 62 or older
• The purchased home will be occupied within 60 days of closing
• The purchased home will be the primary residence
• The difference between the purchase price of the home and the HECM proceeds will be paid in cash from the sale of an existing home or another source of eligible funds

Special restrictions

• Gift funds are an acceptable form of down payment, however certain restrictions may apply
• If the homeowner is using cash, the cash must be seasoned for 60 days
•  There must be proof that the homeowner has “eligible funds” for the closing and must provide all corresponding documents such as:
• Letter of Verification
• Proof of liquidation of retirement assets
• Deed of Sale
• HUD1 Home Sale Statement

The property must be a primary residence and can be

• 1 to 4 units
• Approved Condominiums

Ineligible property types include

• Cooperatives
• Newly constructed principal residences where a Certificate of Occupancy or equivalent has not been issued by the appropriate local authority
• Boarding house
• Bed and Breakfast establishments
• Existing manufactured homes built before June 15, 1976
• Existing manufactured homes built after June 15, 1976 that does not conform to the manufactured home construction safety standards or lack a permanent foundation

All major home repairs must be completed by the property seller before the loan can close:

• Property must meet FHA’s minimum property requirements
• Critical health, safety and structural integrity issues must be repaired
• Repair set-asides are not permitted with the HECM for Purchase
• The buyer cannot pay for any repairs before they own the home
• The repairs must be included in the purchase agreement

Costs

With a HECM for Purchase loan the usual costs associated with selling and buying a property will apply as well as the fees associated with a reverse mortgage loan.