Longbridge Financial - HECM - Home Equity Conversion Mortgage

HECM for Purchase – How You Can Buy a House with a Reverse Mortgage

HECM For Purchase: Your Questions Answered

Take a minute to think of your ideal retirement home. Is it smaller? In a warmer climate? Minimal maintenance? Closer to loved ones, family and friends? Whatever it may be, a Home Equity Conversion Mortgage (HECM) for Purchase may be able to help you get there – and a lot easier than you may have originally thought.

But don’t let this acronym scare you off – we’ve compiled everything you need to know about HECM for Purchase, starting with the “what,” “who,” and “why.”


What is HECM for Purchase?

A Home Equity Conversion Mortgage (HECM) for Purchase is a reverse mortgage that allows seniors ages 62 and above to purchase a new home using loan proceeds – all without a monthly mortgage payment. You read that right – all the borrower assumes responsibility for is the initial down payment, and ongoing property taxes, and maintenance and insurance.

As a borrower, you can choose to repay as much or as little as you’d like each month. The loan does not need to be paid until the home is sold, it is no longer your primary residency, or you pass away. With this flexibility, the HECM for Purchase makes it easy to “right-size” to the home you really want, while keeping in stride with your financial and retirement goals.


Who is Eligible for HECM for Purchase?

Whether you’re ready to downsize, upsize, relocate to a low-maintenance home or more convenient community, or even just settle down in that “dream house” you’ve always imagined,  the HECM for Purchase could be just the solution to help you get there.

To be eligible for the HECM for Purchase program, you must be at least 62 years of age and meet financial criteria as established by the Department of Housing and Urban Development (HUD). In terms of the property, the home must be your primary residence, a single-family home or FHA-approved condominium, and occupied within 60 days of the loan closing. There are also non-FHA programs available, such as Longbridge Platinum, that offer more flexible property eligibility requirements.


Why consider the HECM for Purchase?

  • Downsize, upsize…we call it “Right-Size”
    Whether a home has become too big in terms of physical space, laborious in terms of upkeep and maintenance, or simply no longer fits your lifestyle, selling your existing home and buying a smaller, less expensive home can be a great way to best leverage your home equity and reduce general retirement expenses. As a matter of fact, homeowners who choose to go this route often generate enough money to cover the down payment required for a HECM for Purchase transaction in addition to other ancillary moving expenses.
  • Increase purchase power
    When seniors are looking to buying their perfect homes, they’re ultimately looking to increase their purchasing power, and, as a result, get the amenities they may desire and need. Reverse mortgage funds from a HECM for Purchase allow you to afford more home and improve cashflow.
  • Eliminate monthly mortgage payments
    By using a reverse mortgage to purchase a property, you can bypass the need to ever have a traditional forward mortgage. With just an adequate down payment, you can buy your ideal homes without a monthly mortgage payment. This not only creates more financial flexibility, but also frees up some cash to cover other expenses such as healthcare, paying bills, and even spoiling your family!
  • Retain full ownership of the home
    With a HECM for Purchase, you own the home – not the bank. And as the homeowner, you continue living in the home and assume full ownership, as long as the terms of the loan are met.


Ready to make the move?

At Longbridge Financial, we believe in the power of home. But as we age, the increasing reality is that our dream homes of 30 years ago are no longer the home that is best suited for retirement.

If you’re considering making a move, contact us today to see how a HECM for Purchase can help you relocate to the home your need, while keeping your retirement and financial goals in check.

Looking to buy that high-value dream home? You may be able to do so much more affordably than you think. Longbridge Platinum allows you to access more available funds as compared to a traditional HECM – up to $3 million and still without any monthly mortgage payments. Learn more here.



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