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HECM FOR PURCHASE

loan

A Home Equity Conversion Mortgage (HECM) for Purchase loan is a reverse mortgage
that is specifically designed to assist people age 62 or older in purchasing a home with HECM for
no monthly mortgage payments*. Use the HECM for purchase to increase your sales Purchase Loan
opportunities and move more inventory while offering a viable financial option to your senior Example
clients. Use the charts below to determine how much your buyer can finance with a HECM
for purchase and how much money they would need to provide at closing. Your client, a
homeowner age
*Borrower must continue to pay property taxes, homeowner’s insurance, and home 65, sells their
maintenance costs. existing home for
$450,000.

Example

A couple with the youngest spouse aged 65 would like to buy a $300,000 house without Purchase New
monthly mortgage payments*. How much of the home purchase could be financed by a Home
HECM and how much money would they need to provide at closing?
Your client finds
Step 1 Find the youngest spouse’s age in Chart 1 and then the value of the home they want a NEW home for
to buy. This will give you an estimate of the amount financed by the HECM Loan. In this $300,000.
case the amount financed by HECM at age 65 for a $300,000 home would be $123,717. Use $176,283 as a
down payment.
home value
Use $123,717
$200,000 $300,000 $500,000 $600,000
from a HECM for
Purchase loan
4
65 $79,817 1 $123,717 2 $209,297 3 $253,197 to complete new
client age 75 $91,597 5 $140,497 6 $239,297 7 $289,197 home purchase.
8

9
85 $111,283 $169,583 10 $286,297 11 $345,597 12 +$176,283
Chart 1. Amount Financed by HECM Loan**
DOWN PAYMENT 2
Step 2 Find the youngest spouse’s age in Chart 2 and then the value of the home they want
to buy. This will give you an estimate of the amount the customer would need to provide at +$123,717
closing. In this case the amount the couple with the youngest spouse age 65 would need to HECM TO COMPLETE
provide at closing for a $300,000 home would be $176,283. PURCHASE

$300,000
home value

$200,000 $300,000 $500,000 $600,000

65 $120,183 $176,283 $290,703 $346,803 $273,717 at your client’s
client age 75 $108,403 $159,503 $260,703 $310,803 mortgage payments as long as
disposal and no monthly

borrower pays property taxes,

85 $88,717 $130,417 $213,703 $254,403 homeowner’s insurance, and
home maintenance costs.
Chart 2. Amount Buyer Needs to Provide at Closing
For industry professionals only - not intended for distribution to the general public.