Live Out Your Years in the Home of Your Dreams

A Home Equity Conversion Mortgage (HECM) for Purchase allows qualified buyers age 62 or older to purchase a new primary residence using a larger down payment and no required monthly principal and interest mortgage payment.

Many retirees find that this approach allows them to:

  • Purchase a more desirable home

  • Buy in a better location

  • Choose a home that fits long-term retirement needs

The required down payment is often around 45–55% of the purchase price, but the exact amount varies based on age, interest rates, and home value. The remaining portion is financed through the reverse mortgage.

As with any reverse mortgage, borrowers must continue to pay property taxes, homeowners insurance, maintain the home, and occupy it as their primary residence.

Use a Reverse Mortgage to Purchase Your Primary Retirement Home

A reverse mortgage can be used to purchase a new primary residence, which is why many retirees use this strategy when relocating for retirement.

Common reasons include:

  • Moving closer to family

  • Relocating to a warmer climate

  • Downsizing maintenance while upgrading location

  • Buying a home better suited for aging in place

While a reverse mortgage cannot be used to purchase a second home or investment property, many retirees use it to buy what becomes their main retirement home — and later keep their prior home as a secondary residence if they choose.

This strategy allows retirees to reposition housing without taking on a new monthly mortgage obligation.

Why Some Retirees Choose This Instead of a Traditional Mortgage

When buying a home in retirement, many people assume a traditional mortgage is the only option. While that approach can make sense earlier in life, it often introduces challenges that are harder to manage once income becomes more fixed.

A traditional mortgage typically requires:

  • Monthly principal and interest payments

  • Ongoing income and credit qualification

  • Exposure to future refinancing or requalification risk

For retirees, these requirements can reduce flexibility and increase financial pressure over time.

A Home Equity Conversion Mortgage (HECM) for Purchase works differently. Instead of committing to a monthly mortgage payment, eligible homeowners make a larger down payment upfront and then have no required monthly principal and interest payments for as long as they live in the home as their primary residence and meet loan obligations.

This approach can allow retirees to:

  • Preserve monthly cash flow

  • Reduce reliance on investment withdrawals

  • Avoid requalification risk later in retirement

  • Coordinate housing decisions with income and asset strategies

In addition, some homeowners choose to structure the loan so that a Growing Line of Credit (GLOC) is available after purchase. This creates a flexible reserve that may increase over time and can be accessed later for unexpected expenses, healthcare needs, or supplemental income.

A reverse mortgage is still a loan and is not right for everyone. But for retirees who prioritize cash flow stability and long-term flexibility, it can be an alternative worth understanding when compared to a traditional mortgage.

3rd Party HECM For Purchase Videos

Don Graves: President of the HECM Institute for Housing Wealth Studies, and Professor of Retirement Income at The American College of Financial Services. He is considered one of the nation’s leading educators on HECM Reverse Mortgages in Retirement Income Planning.

Steve Savant: Syndicated financial columnist, Host of the consumer talk show Right on the Money, and News Anchor for On the Money News.

This video is a section of a broadcast of the consumer talk show Right on the Money.

Bob Massi, Fox News Legal Analyst and Host of "The Property Man" answers consumer questions about real estate and real estate markets.

In this video, Mr. Massi interviews mortgage professionals and consumers who have used the HECM for purchase mortgage.

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Clearing Up Common Reverse Mortgage Myths!

Many people dismiss reverse mortgages based on outdated information or misunderstandings.

In our free educational report, you’ll learn:

  • How some homeowners use a reverse mortgage to eliminate a required monthly mortgage payment by paying off an existing loan (if eligible)

  • How reverse mortgages are sometimes coordinated with broader retirement strategies to improve liquidity (no strategy guarantees results)

  • Why homeowners retain ownership of their home, as long as loan terms are met

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Reverse Mortgages in the News