Product Guide
HECM for Purchase
Buy a New Home with No Monthly Mortgage Payment
JP Dauber, NMLS# 386298
Reverse Mortgage Specialist · Licensed in AZ, CA, CO, FL, ID, TX
Last updated March 15, 2026
One of the best-kept secrets in retirement
Most people don't know this program exists. When they hear "reverse mortgage," they think about refinancing their current home. But since 2009, the HECM for Purchase has let seniors buy a completely new home using reverse mortgage financing.
The idea is simple: you move into a home that fits your life right now — one story instead of two, closer to the grandkids, a warmer climate, an easier layout — and you do it without a monthly mortgage payment.
How it works
Think of it like splitting the purchase price into two parts. You bring the down payment, and the HECM handles the rest. Here's how it plays out:
Sell your current home (or use other funds)
Most buyers use the proceeds from selling their existing home as the down payment. Savings, retirement accounts, and family gifts also qualify.
Complete HUD counseling
A required session with a HUD-approved counselor. You can do it by phone, and it takes about an hour. The certificate is valid for 180 days — do this first to avoid delays.
Get pre-qualified and find your home
Your lender determines your price range and down payment. Then you shop with a real estate agent, make an offer, and go under contract — just like any buyer.
Close and move in
The FHA appraisal, underwriting, and paperwork take about 45–60 days. At closing, the HECM covers the gap between your down payment and the purchase price. You move in with no monthly mortgage payment.
For the full walkthrough with tips for a smooth transaction, see our step-by-step guide.
A real-world example
Margaret, age 72 — downsizing from a family home
Margaret sells her 4-bedroom home for $450,000 (paid off).
She wants a smaller single-story home for $350,000.
Using HECM for Purchase, she puts down about $175,000 (roughly 50%).
The HECM covers the remaining $175,000. No monthly mortgage payment.
Result: Margaret has a better-fitting home, no monthly housing payment, and about $275,000 left from the sale to invest or keep as a safety net.
Illustrative example only. Actual down payment depends on age, interest rates, and property value.
Who benefits most
Downsizers
Moving from a larger home to something easier to manage — while keeping cash from the sale.
Relocators
Moving closer to children or grandchildren, or to a state with lower taxes, better weather, or a community you love.
Aging-in-place buyers
Buying a single-story or accessibility-friendly home that's better suited for the long haul.
Cash preservers
Buyers who could pay all-cash but would rather keep liquidity and let the HECM cover part of the purchase.
What it costs
The costs are similar to a standard HECM. Most can be financed into the loan — so they come out of your proceeds, not your pocket.
FHA mortgage insurance: 2% upfront + 0.5%/year
This funds the non-recourse protection — you and your heirs can never owe more than the home is worth.
Origination fee: up to $6,000
The lender's processing fee. It's capped by FHA, and some lenders charge less.
Third-party closing costs: $3,000–$5,000
Appraisal, title insurance, recording fees — the same things you'd pay on any home purchase.
The only cost most buyers pay out of pocket is the ~$125 HUD counseling fee. For the full breakdown, see our costs and fees guide.
How it compares to buying with cash
Some retirees can afford to buy their next home outright. So why use a HECM for Purchase instead?
The answer usually comes down to liquidity. If you pay $400,000 cash for a home, that money is locked in the walls. If you put down $200,000 and let the HECM cover the rest, you keep $200,000 in accessible funds — for emergencies, investments, healthcare, travel, or simply peace of mind.
There's no monthly payment either way. The question is whether you'd rather have your wealth in your home or in your hands. Many financial advisors now recommend the HECM for Purchase as a way to keep more liquidity in retirement without taking on monthly debt.
Properties that qualify
Single-family homes
The most straightforward path. Must be your primary residence and meet FHA property standards.
Condos & townhomes
Condos need FHA project approval or single-unit approval. Townhomes follow single-family rules.
2–4 unit properties
You must live in one unit. Rental income from the other units can help with financial assessment.
Manufactured homes may also qualify if they were built after June 15, 1976 and are on a permanent foundation. Co-ops and homes still under construction do not qualify.
Your ongoing obligations
Just like a standard HECM, the HECM for Purchase comes with three ongoing requirements — the same things you'd do as any homeowner:
Live in the home as your primary residence. Pay property taxes and homeowner's insurance (a LESA can handle this automatically if needed). Maintain the property in reasonable condition.
As long as you meet these three obligations, the loan cannot be called due. You can stay as long as you want.
How much down payment would you need?
Enter your age and target purchase price to get an instant estimate of the down payment required for a HECM for Purchase.
Try the Purchase CalculatorA new home, no monthly payment
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 location you love — without a monthly mortgage payment and without draining your savings. The program has been available since 2009 under HUD's HECM program.
If you're thinking about your next move, run the numbers or reach out directly. I can walk you through the down payment and loan figures for any property you're considering.
Keep reading
Dive deeper into specific topics covered in this guide:
Down Payment Guide →
How much you need and where the money comes from
Downsizing with HECM Purchase →
Sell the big house, keep more of the money
Buying a Home in Retirement →
You don't need a paycheck to buy a home
HECM Purchase vs. Traditional Mortgage →
Side-by-side comparison for buyers over 62
Eligible Property Types →
What you can (and can't) buy with HECM
HECM for Purchase Step-by-Step →
The 7-step process from counseling to closing day
Purchase Calculator →
Estimate your down payment and HECM amount
HECM Purchase in Florida →
No income tax, strong values, Homestead Exemption
HECM Purchase in California →
High values, Prop 19 tax base transfers
HECM Purchase in Arizona →
Low taxes, 55+ communities, year-round sun
HECM Purchase in Texas →
No income tax, homestead protections, 12-day rule
HECM Purchase in Colorado →
Front Range equity, senior tax exemptions