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How Do Buyers Qualify?

Qualifications for a HECM for Purchase reverse mortgage loan
are based on these important factors:

AGE: Your buyer must be age 62 or older (a non-
borrowing spouse may be under age 62)

RESIDENCE: Your buyer’s new home must be your
primary residence (borrowers must occupy property
within 60 days of closing)

DOWN PAYMENT: Your buyer must have a sufficient
down payment to purchase the new home

The borrower(s) must also meet the financial requirements
of the HECM program. The loan amount is based on the age
of the youngest borrower or eligible non-borrowing spouse,
prevailing interest rates, and the value of the home your buyer
wishes to purchase.
EXAMPLE
HECM for Purchase Loan
Your client, a homeowner age 65, sells
their existing home for $450,000.

STEP 1 STEP 2 STEP 3
Purchase a New Home +$175,571 $274,429 at your
Your client finds a NEW Down Payment client’s disposal and
home for $300,000. +$137,700 no monthly mortgage
HECM to Complete payments.*
Use $175,571 as a down Purchase
* Monthly Mortgage Payment
payment. $0. Borrower must continue to
pay property taxes, homeowners
Use $137,700 from a $300,000 insurance, and home maintenance
HECM for Purchase loan (plus closing costs) costs.
to complete new home
purchase.
This example is based on the youngest borrower age 65, Annual Percentage Rate
of 5.717%, home purchase price of $300,000, IMIP of $6,000, origination fee of
$5,000, and estimated closing costs of $2,271. HECM fixed as of 07/01/2019.
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