What Is A Reverse Mortgage For Purchase?
(HECM For Purchase)

Tom and Sarah

A housing trend in 2009, which indicated senior homeowners were selling their current homes, buying new homes by paying cash and THEN doing a traditional Reverse Mortgage, prompted FHA to introduce the Reverse for Purchase (HECM for Purchase or H4P).  This innovative new financing option enables those individuals age 62 and older to purchase a primary residence by using the power of a Reverse Mortgage.

This financing may be an attractive option for those customers who are seeking an alternative option to traditional home financing.  It is a viable way to preserve your liquid assets and avoid a cash-only purchase, while still achieving the ultimate goal-  No Mortgage Payment!

This alternative financing solution enables you to move to a different neighborhood, a more accessible home for your needs and one that fits your “active adult” lifestyle.  Want to learn more?  I can help you obtain the financing you need to purchase your new home and ease your financial concerns. Contact me today to learn more!

Things to know about the Reverse Mortgage for Purchase program:

  • No Debt-to-Income Ratios
  • No Monthly Mortgage Payments
  • You can live in house until last borrower vacates
  • You nor your heirs will never be personally liable for the debt
  • Loan-to-Value Ratios up to 60% (based on age of the youngest borrower)
  • Closing costs are included in mortgage

Qualifying for a Reverse Mortgage for Purchase

  • You or your spouse or co-borrower must be age 62 or older
  • Reverse Mortgage for Purchase (H4P) property must be your primary residence
  • Money for down payment and closing costs must come from the sale of a home, liquid or non-liquid assets or a gift from a relative. It cannot be acquired through any debt (i.e. mortgage, home equity loan or non-secured loan)

Disqualifying factors for a Reverse Mortgage for Purchase

  • Unresolved Federal liens (tax or other)
  • Foreclosure, Short Sale or Deed-in-Lieu on an FHA, VA or USDA loan written within the past 3 years
  • Existing FHA Mortgage

What type of home may I purchase?

  • New or existing single family residence, attached or detached Planned Unit Development (PUD), some manufactured properties (I can help determine eligibility)
  • New or existing FHA Approved Condo (I can help determine condo eligibility)
  • No minimum purchase price- Maximum claim amount $636,150

What is my responsibility as the borrower?

  • Payment of property taxes
  • Payment of homeowners insurance and/or homeowners association dues (if applicable)
  • General upkeep and maintenance of the home