Home Equity Conversion Mortgage (HECM) for Purchase program
Purchase Your Retirement Dream Home With NO MONTHLY LOAN PAYMENTS*
My name is Julie Didyoung, and I have worked in the reverse mortgage industry since 2007. Since 2014, I have been with Reverse Mortgage Funding LLC (RMF), a company founded by industry veterans who have significant experience as leaders and innovators in the Home Equity Conversion Mortgage (HECM) business.
With its exceptional management team, motivated loan specialists and years of experience and expertise, RMF understands what older homeowners value most: flexible solutions, straight talk, and responsive service. For Home Equity Conversion Mortgages, RMF is the clear choice.
Home Equity Conversion Mortgages for Home Buyers Age 62 and Older
If you are age 62 or older and are ready to downsize, upsize, move closer to family, move to a low-maintenance community, or finally buy your “dream house,” consider a Home Equity Conversion Mortgage (HECM) for Purchase (H4P). H4P is a federally insured loan program offered through the Federal Housing Administration (FHA), specifically designed for homebuyers purchasing a new primary residence. You can get a home that’s right-sized for you, while preserving your savings—and the home will be in your name, just like a traditional mortgage.
*Borrower is responsible for property taxes, homeowners insurance, and property maintenance. A HECM is home-secured debt payable upon default or a maturity event.
What is a Home Equity Conversion Mortgage for Purchase (H4P)?
The H4P program allows buyers to combine a down payment with loan proceeds to purchase a new home and not make a loan payment* as long as they live in the home. H4P can increase your purchasing power, and make it easier to afford the home you want. The most important feature of this type of loan is that there is NO personal financial liability for the buyer(s), their heirs, or their estate for any loan balance that exceeds the value of the home when it is being sold to repay the loan.
You may be thinking, "This sounds too good to be true!" But because these loans are FHA insured, it is possible for you to have a mortgage loan that requires no monthly loan payment*. (As the homeowner, you remain responsible for property-related taxes, insurance and maintenance.)
*A HECM is home-secured debt payable upon default or a maturity event.
How Do I Know if I Qualify For a HECM for Purchase?
Based on the following eligibility requirements, any homeowner age 62 or older can apply for a HECM. But a HECM isn’t just about eligibility—it’s also about suitability. Let me help you determine what’s right for you!
Eligibility Requirements Set by the Federal Government
- You must be at least 62 years old. (This applies to all co-owners listed on the home’s title)
- The home you are buying must be your primary residence and must meet FHA/HUD guidelines. Eligible properties are single-family homes and FHA- approved condominiums.
- You must have your down payment or "required investment" from an allowable source. While certain restrictions apply, these are generally funds you have had for at least 90 days or the sale of an asset that you already own. The most common sources of the down payment money are proceeds from the sale of a current home or money the buyer has in a checking, savings, CD, retirement or investment account.
How is the HECM Required Down Payment Determined?
The amount of loan proceeds available is calculated by using the age of the youngest borrower (or non-borrowing spouse meeting certain criteria), the lesser of the home’s sale price or appraised value, and the current interest rate.
The calculation of available loan proceeds comes from the U.S. Department of Housing and Urban Development (HUD). The difference between the available loan proceeds and the cost of the house and purchase costs equals the required investment.
The required investment ranges from approximately 45% to 55% of the home sales price. With the HUD calculation, older borrowers qualify for more in loan proceeds and therefore have a lower required investment.
3 Ways to Purchase a Home
*Borrower is responsible for property taxes, homeowners insurance and property maintenance. A HECM is a home-secured debt payable upon default or a maturity event.