HECM for Purchase: How to Buy a Home With a Reverse Mortgage
Quick answer
A HECM for Purchase (H4P) lets a buyer 62 or older purchase a primary residence using a reverse mortgage. You bring a down payment (typically around 45–70% of the price, depending on your age and rates), the reverse mortgage covers the rest, and there is no monthly mortgage payment for as long as you live in the home and keep up property taxes, insurance, and maintenance. It combines a home purchase and a reverse mortgage into a single closing.
Most people think a reverse mortgage is only for the home you already own. But a special program — the HECM for Purchase (often called H4P) — lets homeowners 62 and older buy a different home using a reverse mortgage, combining the sale of their current home with reverse mortgage proceeds so they can right-size without taking on a monthly mortgage payment.
What Is a HECM for Purchase?
A HECM for Purchase is an FHA-insured reverse mortgage used to buy a home rather than to tap equity in a home you already own. It was created by Congress so seniors could relocate or downsize in one transaction instead of buying with cash (or a traditional mortgage) and then doing a separate reverse mortgage afterward. You combine a down payment with reverse mortgage proceeds to complete the purchase, and from day one there is no required monthly mortgage payment.
Why Seniors Use It
Common reasons include moving closer to children or grandchildren, downsizing to a smaller single-story or low-maintenance home, relocating to a community better suited to retirement, or buying a newer home with fewer repairs. Because there is no monthly mortgage payment, buyers can often purchase a home that better fits their needs while keeping more of their cash from the sale of the old home set aside for living expenses, emergencies, or care.
How Much Down Payment Do You Need?
The required down payment depends mainly on the age of the youngest borrower and current interest rates — older buyers need less down. As a general range, expect to bring roughly 45% to 70% of the purchase price as a down payment, with the reverse mortgage covering the rest. The down payment must come from acceptable sources such as the proceeds from selling your current home, savings, or the sale of other assets — not from another loan.
What You Still Pay
A HECM for Purchase removes the monthly principal-and-interest payment, but you remain responsible for property taxes, homeowners insurance, any HOA dues, and upkeep — exactly as you would on any home you own. The home must be your primary residence, meet FHA property standards, and you must complete a HUD-approved counseling session before moving forward, just like any HECM.
Is It Right for You?
H4P tends to fit buyers who want to move and would otherwise either drain their savings to pay all cash or take on a monthly mortgage payment in retirement. It is not a fit if you do not intend to live in the new home as your primary residence, or if the down payment would leave you without an adequate cash cushion. A no-pressure conversation with Miguel can model the numbers for a specific home and price so you can compare H4P against paying cash or financing traditionally.
Key takeaways
- HECM for Purchase lets buyers 62+ purchase a primary residence using a reverse mortgage, with no monthly mortgage payment.
- You combine a down payment (typically ~45–70% of price) with reverse mortgage proceeds in one closing.
- The down payment must come from acceptable sources like home-sale proceeds or savings — not another loan.
- You still pay property taxes, insurance, HOA dues, and maintenance, and the home must be your primary residence.
- HUD counseling and FHA property standards apply just as they do for a standard HECM.
Frequently asked questions
Can I really buy a house with a reverse mortgage?
Yes. The HECM for Purchase program is designed specifically for this. You combine a down payment with reverse mortgage proceeds in a single closing to buy a primary residence, with no monthly mortgage payment afterward.
Where does the down payment come from?
Usually from the sale of your current home, savings, retirement accounts, or the sale of other assets. It cannot come from another loan, gifts with repayment expectations, or seller-provided funds.
What kinds of homes qualify?
Single-family homes, FHA-approved condos, many manufactured homes that meet FHA standards, and 2–4 unit properties where you live in one unit. The home must be your primary residence and meet FHA property requirements.
Do I still have to pay property taxes and insurance?
Yes. As with any reverse mortgage, you remain responsible for property taxes, homeowners insurance, HOA dues, and maintenance. Keeping these current is what keeps the loan in good standing.