In short
A HECM for Purchase is an FHA-insured reverse mortgage that lets buyers 62 and older purchase a new primary residence by combining a sizeable down payment with a reverse mortgage in one closing. No monthly mortgage payment is required afterward, though taxes, insurance and upkeep still apply.
Reviewed by Kelham and Dave Brown, NMLS #1824866 Kelham | 314516 Dave · Last updated October 19, 2026
Can I use a reverse mortgage to buy a home?
Yes. The HECM for Purchase is a version of the FHA-insured reverse mortgage built for buying a new primary residence. You bring a sizeable down payment, often from the sale of your current home or your savings, and the reverse mortgage covers the rest of the price. After closing, no monthly mortgage payment is required, though you still pay property taxes, homeowners insurance, HOA dues and upkeep. You must be 62 or older, move into the home as your primary residence and complete HUD-approved counseling. How much you need to put down depends on your age, the home's price and current interest rates.
Key takeaways
Maybe the house where you raised your family is more than you need now, or the grandkids live across town. A HECM for Purchase lets buyers 62 and older combine a sizeable down payment with a reverse mortgage to buy their next primary home, with no monthly mortgage payment afterward. Our family relocated from Indiana to Dallas, so we know a move is about much more than the loan. We'll help you understand the numbers and the tradeoffs before you start shopping.
A Different Way to Make Your Next Move
Many homeowners 62 and older want to move for good reasons: a single-level home, less yard to keep up, a smaller footprint, or being minutes from children and grandchildren. The usual choices are to pay cash for the next home, which ties up a large share of your savings, or take out a traditional mortgage, which adds a monthly payment in retirement.
A HECM for Purchase is a third option. It combines your down payment and a reverse mortgage in a single transaction, so you buy the new home and close once, with no monthly mortgage payment afterward.
How It Works
- You choose a home you plan to live in as your primary residence.
- You bring a down payment, often from the sale of your current home, savings or other assets. The down payment for this program is usually much larger than for a traditional mortgage.
- The reverse mortgage covers the rest of the purchase price, along with eligible costs.
- You move in within the timeframe the program requires and live there as your primary home.
From there, it works like any HECM: no monthly mortgage payment is required, interest and fees are added to the balance over time, and the loan becomes due when the last borrower sells, moves out permanently or passes away.
How Much You'll Need to Put Down
There's no one-size answer. The required down payment depends on the age of the youngest borrower or eligible spouse, the price of the home, program lending limits and current interest rates. In general, older borrowers can borrow a larger share and need to bring less. Your rate depends on your scenario and the day's market. Reach out and we'll price it for real. We'll run your numbers before you write an offer so you know what you need to bring to the table.
Timing the Sale of Your Current Home
Most buyers fund the down payment with the proceeds of their current home, so timing matters. Some sell first and rent briefly; others line up both closings close together. We'll help you, your real estate agent and your family map out a sequence that fits your situation, and we'll talk through what happens if one side of the move runs late. It's a lot of moving parts, and we'll keep you informed at every step.
Things to Know Before You Shop
- The home has to meet FHA property standards, and certain property types may not qualify. Ask us before you fall in love with a specific home.
- Newly built homes generally need to be finished and ready for occupancy before closing.
- Seller credits and other contributions are limited under this program.
- You must complete HUD-approved counseling before applying, just as with any HECM.
- Ongoing obligations still apply: property taxes, homeowners insurance, HOA dues and maintenance.
Weighing the Tradeoffs
A HECM for Purchase can free up savings and remove a monthly payment, but it isn't free. Upfront costs, including an FHA mortgage insurance premium and closing costs, can be significant. The loan balance grows over time, so less equity will remain in the new home, and less of it will likely pass to your heirs. If you plan to move again within a few years, the costs may outweigh the benefits. We'll compare this option side by side with paying cash or a traditional mortgage so you can make an informed decision.
Bring Your Family Into the Conversation
A move later in life affects the whole family. We encourage you to include your spouse, adult children or another trusted advisor in your counseling session and in your conversations with us. When everyone understands the plan, the move goes more smoothly.
Want the basics of how reverse mortgages work first? Start with our Reverse Mortgage overview. Already own a home with a mortgage you want to replace? See Reverse Mortgage Refinance. We meet face to face in Frisco, TX or virtually, whichever works for you.
Everything on this page is general education with illustrative examples only. It is not an offer to lend, a rate quote, or tax, legal or benefits advice. Reverse mortgage eligibility, costs, proceeds and guidelines vary by borrower, property and program and are subject to change. Contact our team for details specific to your situation.
Quick facts
- Program
- HECM for Purchase (FHA-insured)
- Minimum age
- 62 (youngest borrower)
- Down payment
- Sizeable; depends on age, home price and current interest rates
- Monthly mortgage payment
- Not required after closing; taxes, insurance and upkeep still apply
- Counseling
- HUD-approved counseling required before applying
- Occupancy
- Must become your primary residence
Is this loan right for you?
Who it's for
- Buyers 62 and older who want to downsize or right-size
- Homeowners moving closer to children, grandchildren or other family
- Buyers who would rather not use all of their savings to pay cash for the next home
- Retirees who want to buy without adding a monthly mortgage payment
- Buyers who plan to stay in the new home for the long term
Who it may not fit
- Buyers under 62
- Buyers who cannot bring a sizeable down payment from their own funds
- Buyers purchasing a second home or investment property
- Buyers who expect to move again within a few years
- Buyers whose main goal is leaving the new home free and clear to heirs
Pros and cons
Pros
- Buy your next home with no monthly mortgage payment afterward
- Keep more of your savings than if you paid cash
- One closing covers the purchase and the reverse mortgage
- Can open up more home options than a cash budget alone
- Non-recourse protection: you and your heirs generally won't owe more than the home is worth
Trade-offs to weigh
- Requires a large down payment from your own funds
- Upfront costs, including mortgage insurance and closing costs, can be significant
- The balance grows over time, reducing equity in the new home
- Less of the home's value will likely pass to your heirs
- Property standards and limits on seller credits can narrow your home choices
Frequently asked questions
How is a HECM for Purchase different from a regular reverse mortgage?
A standard HECM is taken out on a home you already own. A HECM for Purchase is used to buy a new primary residence, combining your down payment and the reverse mortgage in one closing so you don't need a separate traditional mortgage.
Where does the down payment come from?
Usually from the sale of your current home, your savings or other assets you own. It can't simply be borrowed through another loan. We'll walk you through acceptable sources so there are no surprises later.
How much do I need to put down?
It depends on the age of the youngest borrower or eligible spouse, the home's price, program limits and current interest rates. It is typically a much larger share of the price than a traditional purchase. We'll calculate your number before you make an offer.
Can I buy a newly built home?
Often, yes, but the home generally needs to be complete and ready to move into before closing. Ask us early so we can coordinate with the builder's timeline.
Do I have to sell my current home first?
Not always, but most buyers use their sale proceeds for the down payment, so the timing of both transactions matters. We'll help you and your agent plan the sequence that fits your situation.
What happens when I pass away or move out?
The loan becomes due. Your heirs can sell the home and keep any remaining equity, pay off the loan to keep it, or turn it over to the lender. With a HECM, they generally won't owe more than the home is worth.
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Last updated October 19, 2026 · Reviewed by Kelham and Dave Brown, NMLS #1824866 Kelham | 314516 Dave. This page is educational and not a commitment to lend; program details change — ask for current figures.