HUD-approved reverse mortgage counseling is required before a HECM loan can be processed. Counseling is independent of the lender and is designed to ensure borrowers understand the program fully before applying.
A HECM for Purchase lets you buy a new home — the right home for this stage of life — without a required monthly mortgage payment. Bring a substantial down payment from the sale of your current home or savings, finance the rest with a reverse mortgage, and keep your retirement income for living rather than housing costs.
Jarrod Manley
HECM for Purchase Specialist — AL · FL · WA
Most people think of a reverse mortgage as something you do with a home you already own — to eliminate the payment or access equity. The HECM for Purchase is different. It lets you use a reverse mortgage to buy a new home.
Here's how it works: you find the home you want to buy. You bring a substantial down payment — typically from the sale of your current home. The HECM covers the remaining purchase price. From that point forward, no monthly principal and interest payment is required for as long as the home is your primary residence. You stay. You own. You live on your terms.
How a HECM for Purchase Is Structured
The agreed price of your new home
Based on age, rates, and appraised value
Typically 45–65% of purchase price
Or savings, retirement accounts, or gifts
Taxes and insurance still required
Repaid when home is sold or borrower leaves
Example for illustration only. Actual loan amounts, down payments, and terms depend on age, interest rates, home value, and FHA guidelines. This is not a quote.
The HECM for Purchase is not for everyone. But for the right borrower in the right situation, it can be the most financially sound housing decision of their retirement years.
Your current home is larger than you need — the kids have moved out, the yard is more work than you want, or the stairs are a concern. The HECM for Purchase lets you sell the larger home, move into something that fits your life today, and keep more of the sale proceeds for retirement rather than putting them all into a new mortgage.
Grandchildren in Birmingham. A daughter in Orlando. A son in Bellevue. The HECM for Purchase makes a geographic move possible without requiring a large monthly mortgage payment in the new location — so the move can happen on the terms that make sense for your family.
Moving from a cold-weather state to Florida. Downsizing from a four-bedroom to a two-bedroom with no yard. Choosing a 55+ community. The HECM for Purchase supports the housing transition that retirement calls for — without the financial pressure of a traditional mortgage payment on a fixed income.
Putting the full proceeds of a home sale into a new property may feel responsible, but it concentrates wealth in an illiquid asset. The HECM for Purchase allows you to use a meaningful but smaller down payment, keep more of your liquid assets invested or available, and eliminate the monthly mortgage burden at the same time.
Sometimes the right next home for a parent requires a coordinated family decision — where to buy, what to buy, how to finance it. The HECM for Purchase is often part of that conversation. Adult children may contribute to the down payment through gift funds, and understanding the loan structure helps the whole family plan clearly.
A single-story home, an age-restricted community, or a property chosen specifically for accessibility — the HECM for Purchase works for any eligible primary residence. The loan is structured around you, not around the property category.
The loan mechanics are the same across all three states. What changes is the market, the reason for the move, and the family context.
Huntsville, AL
A 70-year-old retired couple in Decatur sold their four-bedroom home for $290,000 after their children moved away. They wanted a single-story home in Huntsville closer to their daughter's family. The right house was priced at $325,000.
They moved into a one-story home near their daughter. No mortgage payment. Over $110,000 in savings preserved for retirement. One closing.
Sarasota, FL
A 74-year-old widow in Ohio sold her paid-off home for $410,000 and wanted to retire near the Gulf Coast. She found a 2-bedroom villa in a 55+ community in Sarasota priced at $395,000.
She moved into a warm-weather home in the community she chose. More than $180,000 in savings available for travel, health, and life. No mortgage payment.
Gig Harbor, WA
A 68-year-old retired engineer in California wanted to be near his son's family in the Puget Sound area. He sold his California home for $780,000 and found a home in Gig Harbor priced at $575,000.
He moved closer to family in a beautiful Pacific Northwest community. Over $400,000 in assets preserved — no mortgage payment on a fixed retirement income.
Scenarios are illustrative. Loan amounts, down payments, and liquidity outcomes depend on individual age, current interest rates, appraised home value, and FHA guidelines. Not a quote or commitment to lend.
A HECM for Purchase is a serious financial decision. These are the facts that matter most.
You hold title to the property throughout the life of the loan. The reverse mortgage is a lien — the same legal structure as any other mortgage. The lender does not own the home. You can sell, leave it to heirs, or refinance at any time.
HECM loans are insured by FHA. This means that if the loan balance ever exceeds the home's value at sale — a scenario called being "underwater" — FHA covers the difference. Your estate and your heirs will never owe more than the home is worth. This protection is paid for through the upfront and ongoing mortgage insurance premium.
The HECM for Purchase requires a large down payment — typically 45%–65% of the purchase price. This is not negotiable. The percentage decreases as the borrower's age increases (the older you are, the larger the loan portion the HECM provides). Down payment funds cannot be borrowed; they must come from verifiable sources such as home sale proceeds, savings, retirement accounts, or gift funds.
No monthly mortgage principal or interest payment is required. However, you remain responsible for property taxes, homeowner's insurance, HOA fees (if applicable), and maintenance. Failure to maintain these obligations can cause the loan to become due. The financial assessment at application evaluates your ability to cover these ongoing costs.
The loan is not due as long as the home is your primary residence. It becomes due when you permanently move out, sell the home, or pass away. At that point, the loan must be repaid — typically from the sale of the property. Heirs generally have 6–12 months to sell or refinance.
Before a HECM application can be processed, all borrowers must complete a session with a HUD-approved independent reverse mortgage counselor. This counselor is not affiliated with the lender and provides an unbiased review of the loan terms, alternatives, and implications. We encourage borrowers to share their counseling session questions with family members as well.
Misconceptions about reverse mortgages prevent many qualified borrowers from exploring a program that could genuinely serve them.
Commonly Heard
"The bank takes ownership of my home with a reverse mortgage."
What Is True
You retain full title and ownership of the home throughout the life of the loan. The reverse mortgage is a lien against the property — the same as any other mortgage. The bank does not own the home. You can sell it, leave it to heirs, or refinance it at any time. The loan is simply secured by the property.
Commonly Heard
"My heirs will be left with debt they have to pay."
What Is True
A HECM is a non-recourse loan. If the loan balance at repayment exceeds the home's sale value, FHA mortgage insurance covers the difference. Your heirs are never personally liable for more than the home is worth. If the home sells for more than the loan balance, the heirs keep the difference as part of the estate.
Commonly Heard
"A reverse mortgage is a last resort for people in financial trouble."
What Is True
A HECM for Purchase is a deliberate financial planning tool — not a sign of financial difficulty. It allows a retiree to purchase the right home for their next chapter without depleting liquid assets or committing to a monthly mortgage payment that strains a fixed income. Many borrowers use it as part of a thoughtful retirement income strategy developed with a financial advisor.
Commonly Heard
"I could lose my home if I outlive the loan."
What Is True
You can live in the home for as long as it remains your primary residence, regardless of how long that is or what the loan balance grows to be. There is no term limit on a HECM. As long as you maintain the property, pay property taxes, and keep homeowner's insurance in place, the loan cannot be called due simply because of age or loan balance growth.
The HECM for Purchase is a significant decision that deserves full consideration, not a sales process. Here's how we approach it.
We prepare a detailed HECM for Purchase illustration — purchase price, estimated loan amount, required down payment, ongoing costs — before any application or commitment. You see exactly what the loan looks like for your specific situation.
We actively encourage borrowers to include adult children or trusted family members in consultations. This is a family decision as much as an individual one, and everyone involved deserves to understand the structure clearly.
We help you identify a HUD-approved counselor and understand what to expect from the required counseling session. The counselor is independent — we encourage you to ask every question you have during that session.
This is not a decision that should be made quickly. If you want to take the illustration home, discuss it with family, or come back with more questions next week, that is exactly what we expect and welcome.
Not every borrower is a good fit for a HECM for Purchase. We will tell you honestly if the program doesn't align with your situation, and we'll discuss what alternatives may serve you better.
Alabama, Florida, and Washington each have distinct housing markets, property tax structures, and retirement demographics. We understand the context in each state and factor it into how we discuss the loan with you.
Clear, complete answers — for borrowers, their families, and the financial professionals who work with them.
Tell us the home you're considering and your general situation. We'll prepare a personalized HECM for Purchase illustration — required down payment, loan amount, ongoing costs — so you and your family can evaluate this option with complete information.
There is no pressure and no timeline. This conversation belongs to you.
Full loan program coverage across Alabama, Florida, and Washington — for every stage of homeownership.
This material is not from HUD or FHA and has not been approved by HUD or a government agency. A HECM is a home-secured loan and the borrower must continue to pay property taxes, homeowner's insurance, and home maintenance. Failure to meet these obligations may cause the loan to become due. This is not a commitment to lend. Loan programs are subject to change. Contact us to discuss your specific situation.
