Page 2 - AAG029_H4P Realtor Brochure

HECM for Purchase
Finance a home purchase with no monthly Frequently Asked Questions

mortgage payments . Call me today!
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Give Senior Clients More Options How home equity conversion WHAT SOURCES ARE ALLOWED FOR THE

With the HECM (Home Equity Conversion mortgages can benefit you: DOWN PAYMENT?
Mortgage) for Purchase loan, everybody wins! Sell more homes to your senior clients The sale of the existing home, gift money,
Increase sales opportunities for yourself and p home buyer’s savings and other assets are
move more inventory while offering a viable who are transitioning into retirement. all sufficient ways to source the required
financial option to your senior clients. funds for closing.
p Benefit from two potential
A HECM for Purchase loan is a reverse transactions: a home sale and a
mortgage that is specifically designed to purchase. What sources CANNOT be used for the cash
assist people age 62 or older purchase a home required to close?
with no monthly mortgage payments . Assist clients with obtaining financing Seller’s financing and concessions, credit
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p card cash advances, bridge loans and
they originally did not think they could
2 Borrower must continue to pay property taxes, subordinate financing cannot be used for
homeowner’s insurance, and home maintenance costs. obtain without existing employment. closing.

What property types are eligible?
Example Single-family residences, FHA-approved
condos, FHA-approved manufactured
homes, and Planned Unit Developments
A married couple wants to purchase a home valued at (PUDs).
$300,000. The youngest spouse’s age is 65 and the current
initial fixed interest rate is 4.56%.
What property types are NOT eligible?
This example is based on the youngest borrower age 65, Annual Percentage Rate of 5.702%, home Co-ops, second homes (investment
purchase price of $300,000, IMIP of $6,000, origination fee of $5,000, and other settlement costs of
$2,440. 2017 HECM fixed as of 10/17/17. properties), boarding houses, bed and
breakfast establishments, and manufactured
homes not approved by FHA.
Purchase HECM Loan Funds Due from Monthly
Price of Home Proceeds Borrower at Closing Mortgage What are the Eligibility Requirements?
Payment 2 Home must become the buyer’s primary
$300,000 $124,260 $175,740 residence and be occupied by the buyer
$0 within 60 days from the closing date.
(not including financing Construction must be complete, and the
and closing fees,
FOR SALE calculation based on age property must be habitable. A certificate of
of youngest borrower, interest occupancy or the equivalent must be issued
rates, and home value) prior to submission of the loan application.