A HECM for Purchase lets buyers 62 and older purchase a new primary residence with a down payment plus a reverse mortgage, so the new home has no required monthly mortgage payment. You still pay taxes, insurance and upkeep.
How it works
- You make one down payment from your own funds, often from selling your current home.
- The reverse mortgage covers the rest, based on your age, the price or appraised value (whichever is lower) and the 2026 limit of $1,249,125.
- You move in within 60 days of closing.
- The seller, builder or agent can't provide your down payment.
- New construction must be finished with a certificate of occupancy before closing.
Who uses it
People downsizing to a single-level home, moving closer to children or grandchildren, or relocating for retirement who want to keep more cash in the bank instead of paying all cash or taking on a monthly mortgage payment.
A simple way to picture it
Say you sell your current home and want to buy a $450,000 home. Instead of spending $450,000 in cash, you put down a portion, often roughly half depending on your age and rates, and the HECM covers the remainder. The cash you don't spend stays available for anything else.
Tell your real estate agent early that you're using a HECM for Purchase, so the contract and timeline account for the FHA appraisal and counseling.