How to buy a home with a reverse mortgage
The HECM for Purchase process, step by step
JP Dauber
NMLS# 386298 · Published April 7, 2026
Why people use HECM for Purchase
Maybe you want to downsize. Maybe you want to move closer to family or into a home that's easier to maintain. Maybe you're relocating to a state with lower taxes or better weather. Whatever the reason, the HECM for Purchase program lets you buy a new primary residence — and never make a monthly mortgage payment on it.
It works like this: you make a larger down payment (funded by selling your current home, savings, or other assets), and a HECM reverse mortgage covers the remaining purchase price. You own the home from day one, and the reverse mortgage balance is repaid when you eventually sell, move out, or pass away — just like a standard HECM.
The 7 steps
Step 1: HUD counseling
Before anything else, you'll complete a session with a HUD-approved counselor. This can be done by phone and usually takes about an hour. The counselor explains the program, costs, and alternatives — and makes sure a HECM for Purchase fits your situation. You'll receive a certificate that's valid for 180 days.
Step 2: Get pre-qualified
Work with a HECM lender to determine how much you can borrow based on your age, interest rates, and the 2026 lending limit ($1,249,125). This tells you your price range and down payment requirement. With a pre-qualification in hand, sellers and agents know you're a serious buyer.
Step 3: Find your home
Shop with a real estate agent — ideally one familiar with HECM transactions. Make an offer just like any other buyer. Your offer strength comes from the cash down payment plus HECM financing. The home must be your primary residence and meet FHA property standards.
Step 4: Formal application
Once you're under contract, submit a full HECM application with your counseling certificate, signed purchase agreement, and financial documents (tax returns, bank statements, insurance info). This is when the lender's financial assessment begins.
Step 5: FHA appraisal
An FHA-approved appraiser evaluates the property for market value and makes sure it meets HUD's minimum property standards. If repairs are needed, they must be completed before closing (or a repair set-aside can be established).
Step 6: Underwriting and clear-to-close
The underwriter reviews everything — your financial assessment, appraisal, title search, and documentation. Once approved, you'll receive a clear-to-close and final loan disclosures. This stage typically takes 1–2 weeks.
Step 7: Closing day
You sign the paperwork, the down payment is wired, and ownership transfers to you. You move into your new home within 60 days. There's a 3-day right of rescission (you can cancel for any reason during this window). In Texas, there's an additional 12-day waiting period before closing.
Where the down payment comes from
Most HECM for Purchase buyers fund their down payment by selling their current home. But HUD doesn't require the money to come from a home sale. Your down payment can come from savings, investment accounts, gifts from family, or the sale of other assets. The key is that the funds are documented and sourced.
Here's a common scenario: you sell your $400,000 home, walk away with $350,000 after paying off a small mortgage and closing costs, and use that money as a down payment on a $500,000 home in a new city. The HECM for Purchase covers the remaining $150,000–$200,000 depending on your age. You own the new home outright with no monthly mortgage payment.
Tips for a smooth transaction
Do counseling first
Complete your HUD counseling before house hunting. Your certificate is valid for 180 days, and this eliminates the biggest delay in the process.
Educate your agent
Some real estate agents aren't familiar with HECM for Purchase. Share the basics so they can set proper expectations with sellers about timelines.
Allow enough time
Ask for a 45–60 day closing window in your purchase contract. HECM purchases take slightly longer than conventional loans.
Buy with HECM for Purchase in our states
We help homeowners buy their next home with a reverse mortgage in Arizona, California, Colorado, Florida, Idaho, and Texas. Use our HECM for Purchase calculator to estimate your down payment.
Seven steps to a payment-free home
The HECM for Purchase is one of the most underused tools in retirement planning. It lets you buy the right home for your next chapter — closer to family, easier to maintain, in a better location — without a monthly mortgage payment. The process has a few extra steps compared to a traditional purchase, but the outcome is worth it.
Want to see what your down payment would look like? Try our HECM for Purchase calculator, or contact me directly to walk through the numbers for your specific situation.