Using a HECM To Purchase Your Next Home

HECM-for-purchaseIn 2008, Congress authorized the HECM (Home Equity Conversion Mortgage) for Purchase loan program which allows qualified seniors, ages 62 or older, to purchase a new principal residence using the equity from the sale of a previous residence or other qualified source.

The Federal Housing Administration (FHA) insured HECM for Purchase loan was designed for seniors to buy a new home and get a reverse mortgage all in one transaction.

This allows seniors to purchase a home that may better fit their needs or allows them to be closer to family members. Just as families outgrow homes as they have more children or their children get older, many seniors would like to down-size to a smaller or more convenient home after retirement.

Others choose to install modifications in their home such as ramps, widened doorways, handrails, etc., move to a single story or handicap accessible residence to make the home more comfortable for their needs or move to an independent retirement community.

Financial advisors and Realtors are able to use this program to help increase their senior client’s purchasing power, allowing them to purchase homes that might not be available to them otherwise.


  • All title holders must be aged 62 years or over
  • The difference between the purchase price of the new home and the HECM loan proceeds must be paid in cash from qualifying sources such as the sale of a prior residence or homebuyer’s other assets or savings
  • Your new home must be your principal residence and must be occupied within 60 days of closing
  • Your home must meet FHA minimum property standards
  • Evidence of a completed counseling session with a HUD-approved Reverse Mortgage counselor is also required. A list of counselors in your area can be found here or by calling (800) 569-4287
  • Your home must be a single-family residence or a FHA approved condominium

A HECM for purchase allows seniors to make one initial investment (down payment) towards the purchase, and therefore, eliminates monthly mortgage payments1.

While many retirees are obtaining traditional reverse mortgage loans to stay in their home, a growing population is choosing to right-size into a home that better suits their needs. If you have questions about which reverse mortgage loan option would be best for you, click here or call 866.751.6105.