How much down payment for a HECM Purchase?
It depends on your age — and it's less than you might think
JP Dauber, NMLS# 386298
Reverse Mortgage Specialist
Last updated March 15, 2026
Why the down payment is larger than a traditional mortgage
With a conventional mortgage, you might put down 5–20% and make monthly payments on the rest. With a HECM for Purchase, there are no monthly payments — ever. That means you need to bring more cash upfront.
Think of it as a trade: a bigger down payment now in exchange for never writing a mortgage check again. For most retirees living on fixed income, that's a trade worth making.
How your age affects the down payment
The HECM program uses something called a Principal Limit Factor (PLF) to determine how much of a home's value you can finance. Older borrowers get a higher PLF — which means a smaller required down payment.
Here's what the numbers typically look like at current interest rates:
Age 62–65
55–60%
down payment needed
Age 72–75
45–50%
down payment needed
Age 82–85
35–40%
down payment needed
These are approximate ranges based on typical expected rates. Your actual down payment depends on your specific age, the expected interest rate at the time of application, and the purchase price. Use our calculator for a personalized estimate.
Interest rates matter too
It's not just age — the "expected interest rate" at the time of your application also affects your down payment. When rates are lower, you qualify to finance a larger portion of the purchase price, which means a smaller down payment. When rates are higher, the reverse is true.
You can't control interest rates, but you can control timing. If rates are elevated, waiting a few months might reduce your required down payment. Or you might decide the certainty of locking in today is worth a slightly higher upfront cost.
Where the down payment can come from
Sale of your current home
The most common source. Sell your current home, use a portion for the down payment, and keep the rest as savings. Bridge financing may be available if the timing doesn't line up perfectly.
Savings and investments
Bank accounts, CDs, brokerage accounts, and retirement account withdrawals all work. Funds need to be documented and seasoned (typically 2 months of bank statements).
Gifts from family
Children or other family members can gift funds toward your down payment. A signed gift letter is required, confirming no repayment is expected.
One source that doesn't work: you cannot borrow the down payment. Loans, credit cards, and lines of credit are not acceptable sources. The funds must be yours — whether from sale proceeds, savings, or gifts.
A real example with numbers
Jim and Carol, both 74 — buying near the grandkids
They want to buy a $400,000 single-story home closer to family.
At age 74 and current rates, the HECM can finance about 50% of the value.
Required down payment: approximately $200,000.
They sell their current home for $350,000 (paid off).
Result: $200,000 goes to the down payment, $150,000 stays in the bank. New home, no mortgage payment, and a healthy cash reserve.
Illustrative example only. Actual figures depend on age, expected rate, and property value at the time of application.
Closing costs on top of the down payment
The down payment isn't the only cost. Like any home purchase, you'll have closing costs — origination fee, appraisal, title insurance, recording fees, and FHA mortgage insurance. These typically run $10,000–$15,000 for a HECM for Purchase.
The good news: most of these costs can be financed into the HECM rather than paid out of pocket. The only cost most buyers pay in cash is the ~$125 HUD counseling fee. For the full breakdown, see costs and fees.
More down payment, more flexibility
The HECM for Purchase down payment is bigger than a conventional mortgage — but you're trading that larger upfront payment for the freedom of never making a monthly mortgage payment again. For most buyers, the down payment comes from selling their current home, leaving plenty of cash left over.
Curious what your numbers look like? Try the purchase calculator or reach out — I'll run a personalized scenario based on your age and the homes you're considering.