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HECM for Purchase Mortgages
Buy Your Next Home With Retirement in Mind
Your housing needs can change in retirement. You may want to move closer to family, reduce home maintenance, improve accessibility, relocate to a new community, or simply choose a home that better fits the way you want to live.
A HECM for Purchase can provide another way to finance that move—without requiring monthly principal and interest mortgage payments.*
What Is a HECM for Purchase?
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A HECM for Purchase, sometimes called an H4P, is an FHA-insured reverse mortgage that allows eligible homeowners age 62 and older to purchase a new primary residence.
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Instead of paying the entire purchase price in cash, you combine funds of your own with proceeds from the HECM to complete the purchase.
This can allow you to keep more of your available assets while purchasing a home that better fits your retirement plans.
Why Consider a HECM for Purchase?
Keep More of Your Available Assets
Rather than using a large portion of your savings or investments to purchase your next home, a HECM for Purchase may allow you to keep more of those assets available for retirement.
Expand Your Housing Choices
Combining your funds with HECM loan proceeds may give you more flexibility when choosing the location, features, or type of home that fits your plans.
Reduce Required Monthly Housing Expenses
Monthly principal and interest mortgage payments are not required as long as the loan requirements are met.*
Choose a Home for the Next Stage of Retirement
General Requirements:
A HECM for Purchase has specific eligibility and property requirements.
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Be age 62 or older
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Purchase the home as your primary residence
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Complete counseling with a HUD-approved reverse mortgage counselor
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Meet FHA financial assessment requirements
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Have sufficient funds for your required investment and closing costs
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Purchase an eligible property
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Continue paying property taxes, homeowners insurance, applicable HOA dues, and maintain the home
Every situation is different, so part of the process is determining whether both the borrower and the property meet the program requirements.
Choose a Home for the Next Stage of Retirement
Why Consider a HECM for Purchase?
1. Keep More of Your Available Assets
Rather than using a large portion of your savings or investments to purchase your next home, a HECM for Purchase may allow you to keep more of those assets available for retirement.
3. Reduce Required Monthly Housing Expenses
Monthly principal and interest mortgage payments are not required as long as the loan requirements are met.*
2. Keep More of Your Available Assets
Combining your funds with HECM loan proceeds may give you more flexibility when choosing the location, features, or type of home that fits your plans.
4. Choose a Home for the Next Stage of Retirement
Choose a Home for the Next Stage of Retirement
Buy Your Next Home With Retirement in Mind
A HECM for Purchase isn't only for downsizing.
It may provide another option when moving into a smaller home, purchasing a more expensive home, relocating closer to family, improving accessibility, or choosing a community that better fits your retirement plans.
Moving Into a Home That Costs More
Selling your current home doesn't necessarily mean your next home has to cost less.
A HECM for Purchase may allow you to combine proceeds from the sale of your current home with HECM financing to purchase a home that better fits your retirement goals—without using all of your available assets toward the purchase.
This can be especially helpful when relocating to a more expensive area, moving closer to family, or purchasing a home with features that may make retirement living easier.
Downsizing
James and Mary, who are 62 and 59, want to move to a newly constructed home to retire. They want to keep the same size home they currently have, but home values are more than double in the new community compared to where they live currently. A Realtor® recommended to them that with a reverse mortgage for home purchase, they could buy a house similar to the one that they currently live in.
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CLIENTS COULD SELL THEIR HOUSE FOR $391,400 AND PURCHASE A NEWLY
CONSTRUCTED HOME FOR $600,000.*
*House and story are for illustration purposes only. House may not be available for purchase.
DID YOU KNOW? You may be able to close on an H4P loan from Fairway in as little as 15 days*
*15-day close is not available in all states and requires receiving a non-contingent appraisal within ten days from the appraiser.
Moving Into a Home That Costs Less
Downsizing can create an opportunity to reduce the amount of your wealth tied up in your home.
Instead of using all of the proceeds from the sale of your current home to purchase the next one, a HECM for Purchase may allow you to use a portion toward the purchase and retain the remaining funds for other retirement needs.
The goal isn't simply to buy a less expensive home. It's to determine how your next home fits into your overall retirement plan.
Downsizing
Cindy, who is 62, is selling her current home that is owned free and clear to move closer to her grandchildren. She would like to downsize when she moves and be able to set up an annuity for her grandchildren to help pay for college*. The community she would like to move to is more expensive than her current one. A reverse mortgage can allow her to purchase a home in the new community and be able to have money left over from the sale of her current house.
CLIENT COULD DOWNSIZE HER $400,000 HOME, PURCHASE A $375,000 HOUSE AND HAVE $170,000 TO SPEND ON AN ANNUITY.*
*House and story are for illustration purposes only. House may not be available for purchase.
Is a HECM for Purchase Right for Your Move?
A HECM for Purchase isn't about buying the biggest home possible. It's about looking at your home, available assets, monthly expenses, and retirement goals together.
Before deciding how to finance your next home, it can help to ask two different questions:
How much home can I buy, and what housing choice makes the most sense for the retirement I want?
Sometimes those questions lead to the same answer. Sometimes they don't. Understanding your options before you make the move can help you make a more informed decision.
Ready to Explore Your Options?
Buying your next home is about more than the purchase price. It's about understanding how that home fits into your retirement plans. A conversation can help you compare your options and determine whether a HECM for Purchase makes sense for you.