A HECM for Purchase can help an eligible buyer age 62 or older buy a new principal residence with a reverse mortgage in one transaction. It is often explored by people who want to downsize, move closer to family or choose a home that better fits retirement.
How a HECM for Purchase works
The buyer contributes an upfront monetary investment and the HECM finances the remaining eligible amount. The required cash depends on factors including the youngest borrower’s age, the home’s value or purchase price, current interest rates and program limits. The buyer must have enough verified funds to cover the difference between the HECM proceeds and the purchase price, plus costs that are not financed.
Borrowers are not required to make monthly principal and interest payments while the program requirements are met. They remain responsible for property taxes, homeowners insurance, maintenance and applicable HOA or property charges.
Why Oregon buyers consider this option
- Move to a one-level or lower-maintenance home.
- Relocate within the Portland area or elsewhere in Oregon.
- Preserve more liquid assets than an all-cash purchase would require.
- Avoid taking on required monthly principal and interest payments.
- Purchase a home designed for aging in place.
A typical purchase process
- Discuss your goals. Review your target price range, available funds and preferred location.
- Complete required counseling. A HECM borrower must meet with a HUD-approved counselor before closing.
- Review a personalized estimate. Available proceeds and required investment are calculated for the borrower and property.
- Find an eligible home. The property must be intended as the principal residence and satisfy applicable FHA requirements.
- Complete underwriting and appraisal. The lender verifies finances, the source of funds and property eligibility.
- Close and occupy the home. After closing, ongoing occupancy and property-charge responsibilities continue.
Important tradeoffs
A HECM for Purchase is not the same as buying with cash. Interest and financed fees increase the loan balance over time, and future home equity may be lower. Available programs, property eligibility and contribution rules can change, so the final decision should be based on current disclosures and a complete loan comparison.
Plan your Portland-area move
Mark Boeck, Reverse Loan Consultant with New American Funding (NMLS #107448), can help you estimate the investment required for a target home and coordinate the financing timeline with your real estate professionals.
Independent resource: Read the HUD HECM program overview. Product availability, eligibility and proceeds vary; a lender makes the final eligibility determination.
