A Home Equity Conversion Mortgage (HECM) for purchase is a type of reverse mortgage that allows seniors aged 62 or older to purchase a new primary residence using a reverse mortgage loan. To be eligible for a HECM for purchase, individuals must meet the following requirements:

• The primary borrower must be at least 62 years old or older. In the case of married couples, at least one spouse must meet this age requirement.

• The home being purchased must be the borrower’s primary residence. It cannot be an investment property or a vacation home.

• The borrower must demonstrate the ability to pay for the ongoing costs associated with homeownership, including property taxes, insurance, and maintenance. Lenders typically assess the borrower’s income, assets, and creditworthiness to determine their financial capacity.

• The borrower must make a down payment from the sale proceeds of their previous home or other sources. The amount of the down payment will depend on factors such as the borrower’s age, the home’s appraised value, and current interest rates.

• Before obtaining a HECM for purchase, borrowers are required to attend a counseling session with a HUD-approved housing counseling agency. The purpose of this counseling is to ensure that the borrower understands the terms and implications of the reverse mortgage.

While a HECM for purchase allows seniors to use a reverse mortgage to buy a new home, they are still responsible for paying property taxes, insurance, and maintenance costs. Therefore, it’s recommended to consult with a reverse mortgage specialist or HUD-approved housing counselor to determine your eligibility and understand the details of the HECM for purchase loan program.