HECM for Purchase in California
Buy a new home using a reverse mortgage — no required monthly mortgage payment
A HECM for Purchase lets eligible homeowners 62+ buy a new primary residence using a reverse mortgage instead of a traditional loan. This page explains how it works, who it fits best, and how to find the right home without adding a new monthly mortgage payment. As with any reverse mortgage, the borrower remains responsible for property taxes, homeowners insurance, and home maintenance.
Quick definition: HECM for Purchase
A HECM for Purchase is a federally insured reverse mortgage that allows eligible buyers (typically age 62+) to purchase a primary residence by combining a down payment with reverse mortgage proceeds. The result: no required monthly mortgage payment, as long as program rules are followed.
It’s often used by homeowners who are downsizing, relocating, or buying their “forever home” without taking on a new traditional mortgage.
When a HECM for Purchase is usually the right move
Many buyers use HECM for Purchase to eliminate required monthly mortgage payments while still owning their home.
- Common for retirees on fixed income
- Helpful when preserving cash flow matters
- Often paired with downsizing or relocation
How HECM for Purchase works (step by step)
Finding the right home for a reverse purchase
Not every property is a fit for HECM for Purchase. Location, property type, and condition all matter. Aligning the home search with the loan structure early is what keeps the process calm and predictable.
Want us to sanity-check a home before you write an offer? Schedule a call and we’ll tell you what to watch.
When to compare other reverse options
If you already own a home and don’t plan to move, a traditional HECM may fit better.
For higher-value homes or age 55+ scenarios, a proprietary jumbo reverse may be worth reviewing.
What is a HECM for Purchase and how does it work?
A HECM for Purchase is a federally insured reverse mortgage that lets eligible buyers — typically age 62 and up — buy a new primary residence by combining a down payment with reverse mortgage proceeds. You contribute part of the purchase price from home-sale proceeds, savings, or other assets, and the reverse mortgage funds the rest. There is no required monthly mortgage payment afterward, though you remain responsible for property taxes, homeowners insurance, and upkeep.
How much down payment does a HECM for Purchase require?
The required down payment varies with your age, current interest rates, and the home price — it usually represents a meaningful share of the purchase price, funded from sale proceeds, savings, or other assets. There is no single fixed percentage that applies to everyone. A broker can estimate your figure once the property and your age are known, subject to qualification and lender guidelines.
Can I use a HECM for Purchase on new construction?
Often yes — newly built homes can qualify, but the property must meet FHA requirements and generally must be complete and approved for occupancy before the loan can close. That makes timing important: the builder’s schedule and the loan process need to line up early. Review the specific property with a broker before writing an offer, since eligibility depends on the home and program guidelines.
What closing costs come with a HECM for Purchase?
Closing costs vary by home price and program, and typically include origination charges, FHA mortgage insurance, and standard third-party fees such as title, escrow, and appraisal. These costs either reduce the proceeds available or are paid at closing alongside your down payment. Closing costs are one of the honest tradeoffs of any reverse purchase, so compare a full written estimate before committing.
Do I still own the home with a HECM for Purchase?
Yes — title typically stays in your name, just as with a traditional mortgage. The reverse mortgage is a lien against the property, not a sale. You remain the owner as long as you live in the home as your primary residence and keep property taxes, insurance, and maintenance current.
Can I use HECM for Purchase on any home?
No. The home must meet FHA property requirements and must be your primary residence.
Is HECM for Purchase better than buying with cash?
Not automatically — it depends on how much liquidity you want to preserve. Paying all cash ties up money in the home, while a HECM for Purchase lets you keep more of your sale proceeds or savings available for retirement needs. The tradeoff is that the loan balance grows over time as interest accrues, which reduces the equity left later. Comparing both paths side by side, with your goals and timeline in view, is the reliable way to decide.