Reverse For Purchase

Utilizing a reverse mortgage to purchase a home without incurring monthly mortgage payments is not an illusion; it’s a tangible option that can align with your financial and retirement objectives. This financial tool, specifically the Home Equity Conversion Mortgage (HECM) for Purchase, empowers eligible individuals to secure a new residence without the burden of immediate repayment, as long as they remain current on property taxes, insurance, and home maintenance.

How It Works

If structured correctly, even your taxes and insurance can be included in the program, allowing you freedom from the stress of maintaining those services as well. The primary aim is to facilitate the acquisition of a suitable home while ensuring financial stability during retirement.

For those who qualify, the HECM for Purchase reverse mortgage offers the flexibility to relocate to a residence that better suits evolving needs, such as proximity to family, enhanced physical accessibility, or alignment with current and future requirements. This option is particularly advantageous for homeowners contemplating downsizing, as it provides an avenue to access funds tied up in their current property and use them to purchase a more suitable and manageable home.

It’s essential to acknowledge that, although the HECM for Purchase reverse mortgage eliminates monthly mortgage payments, it remains a loan. Interest accrues on the disbursed amount, emphasizing the importance of understanding the financial implications and carefully evaluating the long-term impact on your overall financial strategy. Our experienced staff and training can help you with this.

HECM for Purchase Overview

Utilize a HECM for Purchase reverse mortgage loan to acquire your next home.

Key Eligibility Criteria:

    • The youngest titleholder must be aged 62 or above.
    • Occupancy of the purchased home within 60 days of closing.
    • The purchased property must serve as your primary residence.
    • Meet financial eligibility criteria established by HUD.
    • Potential need to allocate additional funds from loan proceeds for taxes and insurance.
    • Difference between home purchase price and HECM proceeds to be covered by cash from sale of existing property or other eligible sources.

    Special Restrictions

    • Gift funds may be acceptable for down payment with potential restrictions.
    • Cash used must be seasoned for 60 days.
    • Proof of “eligible funds” required for closing, with specific documentation depending on funding source.

    Property Eligibility

    • Primary residence can be a single-family home, FHA-approved condominium, or manufactured home meeting FHA guidelines.
    • Ineligible property types include cooperatives, newly constructed residences without proper certification, boarding houses, bed and breakfast establishments, and multi-unit properties.

    Property Condition and Repairs

    • Seller must complete all major home repairs before loan closure, meeting FHA’s minimum property requirements.
    • Critical health, safety, and structural issues must be addressed.
    • Repair set-asides not permitted.
    • Buyer cannot cover repair costs prior to home ownership.
    • Repairs must be included in purchase agreement.

    Costs

    • Standard costs associated with selling and buying property apply.
    • Fees related to reverse mortgage loan also applicable.