HECM for Purchase: How Seniors Can Buy a New Home Without Monthly Payments
Most people know a reverse mortgage can help seniors access equity in a home they already own. But fewer people know about the HECM for Purchase program — a powerful tool that lets seniors buy a new home using a reverse mortgage, without taking on a new monthly mortgage payment.
What Is a HECM for Purchase?
The HECM (Home Equity Conversion Mortgage) for Purchase program allows adults age 62 or older to purchase a new principal residence using reverse mortgage loan proceeds combined with their own cash or the proceeds from selling their current home. The result: they move into their new home with no monthly mortgage payment.
This is a single transaction — the reverse mortgage and the home purchase happen simultaneously at the same closing. It’s been available since 2009 but remains one of the least-understood options in the reverse mortgage landscape.
Why Families Are Turning to This Option
Many families are discovering HECM for Purchase when a parent needs to:
- Downsize from a large family home to something more manageable
- Move closer to adult children or grandchildren
- Find a single-story home after mobility challenges emerge
- Relocate to a more affordable area with lower property taxes
- Leave a home that requires too much maintenance
How It Works: Step by Step
Get Counseling
Complete HUD-approved reverse mortgage counseling — required for all HECM loans.
Find the Right Home
Identify a new home that better suits your parent's needs — single-story, accessibility features, closer to family.
Determine the Down Payment
Calculate the required down payment based on the home's appraised value, your parent's age, and current interest rates.
Close the Transaction
At closing, the down payment comes from your parent's savings or the sale of the current home, and the HECM covers the rest.
Move In, No Monthly Payments
Your parent moves into the new home with no monthly mortgage payments — just property taxes, insurance, and maintenance.
How Much Down Payment Is Required?
The required down payment depends on three factors: the home’s appraised value, the youngest borrower’s age, and the current expected interest rate. In general, the older the borrower and the lower the home price, the smaller the required down payment.
For example, a 70-year-old purchasing a $400,000 home might need a down payment of approximately $180,000–$220,000. A 65-year-old purchasing the same home might need closer to $210,000–$250,000. These are illustrative examples — actual amounts vary based on current rates and specific circumstances.
Key Benefits
- No monthly mortgage payments — the home is free and clear of a monthly obligation
- Single closing — the purchase and reverse mortgage happen in one transaction
- Non-recourse protection — the same FHA insurance that protects traditional reverse mortgages
- Remaining equity is yours — if the down payment exceeds the required amount, the surplus can be used for other needs
Is HECM for Purchase Right for Your Parent?
Adam can run the numbers for your specific situation and show you exactly what the down payment would look like for your parent’s target home.
Schedule a Free Consultation