HECM for Purchase
Consider a HECM for the Purchase of a New Home
Many seniors 62 and older use a Home Equity Conversion Mortgage (HECM) to generate funds for a more comfortable retirement, to travel, or to help children and grandchildren. But there’s a benefit some seniors aren’t aware of: using a HECM to purchase a new home. In basic terms, a HECM for Purchase can provide the funds to buy a different home — eliminating the need to ever make a monthly mortgage payment on that new home.
To learn more about using a HECM for Purchase and other reverse mortgage requirements, contact a loan officer at Citizens Lending Group today.
It’s a reverse mortgage — used to buy a home, not just refinance one.
Most people think of a reverse mortgage as something you do with a home you already own. HECM for Purchase is different: it’s a government-insured reverse mortgage used specifically to purchase a new primary residence.
Here’s how it works: you sell your current home — or use other available funds — to make a down payment on the new property, typically between 45% and 65% of the purchase price. A reverse mortgage covers the remaining balance. You move in, you own the home, and you make no monthly mortgage payments for as long as it remains your primary residence.
Traditional Home Purchase
Smaller down payment, finance the rest with a conventional mortgage.
HECM for Purchase
Down payment of ~45–65%, a reverse mortgage covers the remaining balance.
The down payment requirement varies based on your age, the home’s purchase price, and current interest rates. The older you are, the lower the required down payment tends to be. Jeff can run the numbers for your specific situation during a free consultation.
One important note: you must still pay property taxes, homeowners insurance, and HOA dues, and maintain the home as your primary residence — the same obligations as any homeowner.
A Good Reason to Consider a HECM for Purchasing a New Home
One of the most common examples is a retired couple with a large, comfortable home that has become too big now that their children are grown. Rather than continue maintaining space they no longer use, they can use a HECM for Purchase to downsize. Others use it to move closer to grown children and grandchildren in another city or state, or to relocate to a warmer climate — selling the current residence and purchasing a new home.
Seniors Ready to Downsize
You’ve spent decades in a home that served your family well. Now it’s larger than you need, and the upkeep costs more time and money than it’s worth. HECM for Purchase lets you sell your current home, use the equity as a down payment, and move into a home that fits your life now — without taking on monthly mortgage payments in retirement.
Seniors Relocating Closer to Family
Your children and grandchildren live across town — or across the state. HECM for Purchase allows you to sell your current home and buy a new one closer to the people who matter most, without a traditional mortgage payment adding to your monthly expenses.
Seniors Moving to a More Suitable Home
A single-story home. A smaller yard. A community designed for your stage of life. Whatever the right next home looks like for you, HECM for Purchase makes it possible to buy it without depleting savings or taking on new monthly debt obligations.
A HECM for Purchase Example
A specific example can help. Suppose a couple owns a home worth $400,000 and still owes $100,000. They sell the current home and, after paying off the mortgage, have about $300,000. With the help of a HECM, they can purchase a new home and eliminate a monthly payment while keeping extra funds:
- New home purchase price$300,000
- Down payment (from sale of home)$200,000
- Balance completed with HECM$100,000
- Monthly mortgage payment$0
- Remaining proceeds from the reverse mortgage$100,000
Plan Your HECM for Purchase Carefully, with Professional Help
When planned with the couple’s best interests in mind, the benefits can include:
- Paying closing costs only once.
- Loan funds that come with no tax obligation (check with your reverse mortgage expert to confirm).
- No monthly mortgage payments on the new home, since it’s paid for with the HECM.
- Extra funds that may be available for your own use, beyond the home purchase price.
To understand how a HECM for Purchase might work for you, contact us today.
Contact UsHow it works, step by step.
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1
Determine Your Budget
Start by understanding what you can spend. Your available funds — from the sale of your current home, savings, or other assets — will determine your down payment capacity and the price range of homes you can consider.
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2
Get Pre-Qualified by Citizens
Jeff runs through your eligibility and calculates the HECM for Purchase amount you qualify for based on your age, the target home value, and current interest rates. This gives you a clear picture of your buying power before you start looking.
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3
Find Your Home and Make an Offer
Work with a real estate agent to find a qualifying property. Your offer should note that financing will be through a HECM for Purchase — Jeff is available to speak directly with any real estate agent who wants to understand how the process works.
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4
Complete HUD Counseling
As with all HECM products, a session with a HUD-approved independent counselor is required before closing. This is a consumer protection built into the program — not a sales step.
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5
Close and Move In
Once the appraisal, counseling, and underwriting are complete, the loan closes and the home is yours. No monthly mortgage payment. No deadline to move.
Thinking about moving? Ask Jeff if HECM for Purchase makes sense for your situation.
This is one of the most underused retirement planning tools available to senior homeowners — and one of the areas Jeff knows best. A free consultation will tell you quickly whether it’s a fit.
We work with Orange County real estate agents who want to understand HECM for Purchase for their senior clients. Agents are welcome to call Jeff directly with questions.
Jeff Krolosky · NMLS #483675 · Citizens Lending Group · NMLS #1109984
These materials are not from HUD or FHA and were not approved by HUD or a government agency. Reverse mortgage is a loan. You must continue to pay property taxes, homeowners insurance, and HOA dues.
