michaelbrouse.com · Retirement Mortgage Professional
Yes. Eligible buyers age 62 or older can use HECM for Purchase to buy a qualifying primary residence, but they need their own funds to cover the gap between loan proceeds and the price plus closing costs.
Educational content prepared for michaelbrouse.com. Mortgage contact: Michael Brouse, NMLS #805832. Updated 2026-11-13.
HECM for Purchase allows eligible buyers age 62 or older to purchase a new primary residence using a Home Equity Conversion Mortgage. The HECM is insured by the Federal Housing Administration. It supplies part of the purchase funding; it does not normally cover the entire price and closing costs.
Like other HECMs, it generally has no required monthly principal-and-interest payment while the borrower meets the loan conditions. Interest and applicable charges accumulate in the balance when unpaid. Repayment is deferred, not forgiven. This educational overview is general information, not individualized financial, tax, or legal advice.
Sources: HUD: Home Equity Conversion Mortgages for Seniors · CFPB: Can I use a reverse mortgage loan to buy a home? · CFPB: How much does a reverse mortgage loan cost?
HUD explains the basic funding requirement: the buyer needs cash to pay the difference between HECM proceeds and the home's sales price, plus closing costs. The transaction therefore combines the reverse mortgage with the buyer's available funds. Closing expenses can include lender charges, FHA mortgage insurance, and third-party costs such as appraisal and title work.
There is no guaranteed down payment percentage for every buyer. Available proceeds depend on factors including age, interest rates, and the applicable property value and program limit. Costs and any required set-asides can also affect the amount needed to close. A general calculator cannot replace the lender's written estimate for the specific buyer and property.
A clear estimate separates the purchase price, loan proceeds, financed costs, and cash required. It also identifies whether the proposed sources of the buyer's funds are acceptable under program rules. If the purchase depends on selling another home, the timing and availability of those proceeds matter.
Sources: HUD: Home Equity Conversion Mortgages for Seniors · CFPB: How much does a reverse mortgage loan cost? · CFPB: Can I use a reverse mortgage loan to buy a home?
HECM for Purchase is for a home you will occupy as your primary residence, not a second home, vacation property, or investment home. Principal residence means the home where you live for the majority of the year. Plans to move elsewhere or use the property only occasionally can conflict with that requirement.
Not every property is eligible. The home must satisfy applicable property standards, and the lender reviews the property and appraisal. The CFPB specifically notes that cooperative units and some manufactured homes are ineligible for this purchase program. Eligibility should not be assumed simply because a home is listed for sale or a seller accepts an offer.
Property eligibility and personal suitability are different questions. The ability to maintain the home, its continuing expenses, and whether it meets foreseeable housing needs remain important even if it satisfies the lending requirements.
Sources: CFPB: Can I use a reverse mortgage loan to buy a home? · CFPB: Can anyone take out a reverse mortgage loan? · CFPB: What should I ask a reverse mortgage counselor?
Buyers must complete HUD-approved reverse mortgage counseling and qualify with the lender. The financial assessment considers the ability to meet continuing property obligations. Equity contributed at purchase does not, by itself, establish affordability. Some loan funds may need to be reserved for property charges rather than being available for other uses.
After closing, borrowers remain responsible for property taxes, required homeowners and flood insurance, maintenance, and applicable association charges. They must continue to occupy the home as their primary residence and meet the other loan terms. Failing to meet those obligations can cause the loan to become due and can lead to foreclosure.
Sources: CFPB: Can anyone take out a reverse mortgage loan? · FTC: Reverse Mortgages · CFPB: Can I use a reverse mortgage loan to buy a home?
The potential benefit is purchasing a suitable home without a required monthly principal-and-interest payment. The tradeoff is committing substantial funds at closing while taking on a debt that can grow. Future moving plans, care expenses, and the equity available to heirs remain part of the comparison.
Useful questions include how much cash is needed, what costs are financed, which repairs or property conditions must be resolved, and how the balance may change over time. Comparing a traditional mortgage, a less expensive property, and other housing choices can clarify the tradeoffs. No loan structure is universally best, and approval is not a judgment that the purchase suits your finances.
Sources: CFPB: What should I ask a reverse mortgage counselor? · FTC: Reverse Mortgages · CFPB: How much does a reverse mortgage loan cost?
No. The home purchased through HECM for Purchase must be your primary residence, not a second home or investment property.
No. Cash needed depends on the purchase price, available HECM proceeds, closing costs, and any required reserves. A lender must evaluate the specific transaction.
Prepared for michaelbrouse.com. Mortgage contact: Michael Brouse, NMLS #805832. General education, not individualized legal, tax, financial, or housing advice. Program availability and terms vary; confirm current requirements before acting.