HECM for Purchase lets buyers 62 and older buy a new primary residence by combining a down payment from their own funds with reverse mortgage proceeds, all in one closing. No monthly mortgage payment is required afterward, but you still pay property taxes, insurance and upkeep, and you generally must move in within 60 days of closing.
- Buyers 62+ combine a down payment with HECM proceeds to buy a new primary residence in one closing.
- No monthly mortgage payment is required, but taxes, insurance, and upkeep still apply.
- The down payment must come from sources FHA accepts, such as savings or the sale of your old home, and can't leave you with new unpaid debts.
- You generally must move in within 60 days of closing.
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Get your free guideHow does HECM for Purchase work?
With a HECM for Purchase (H4P), the reverse mortgage covers part of the purchase price and you pay the rest as a down payment. Everything closes at once, so you don't need a traditional mortgage first and a reverse mortgage later. That means one set of closing costs.
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Try the estimate calculatorHow large the down payment has to be depends on the same factors as any HECM: the youngest borrower's age, the expected interest rate, and the price or appraised value (whichever is lower, up to the $1,249,125 limit, valid through Dec 31, 2026). Older buyers generally need a smaller down payment.
Who uses it
- Downsizers who sell a larger home and buy a smaller, easier-to-maintain one
- Retirees moving closer to family
- Buyers who want a single-level or accessible home without taking on a monthly mortgage payment
Key requirements
- The youngest borrower is 62+, and the new home will be your primary residence. You must move in within 60 days of closing (24 CFR 206.39(b)).
- The down payment must come from sources FHA accepts, such as cash on hand or money from selling your old home or other assets. Sweat equity, trade equity, rent credit and premium pricing can't be used, and the purchase can't leave you with new unpaid debts tied to it (HUD Handbook 4000.1, section II.B.8.a).
- The property must be eligible (see requirements). For a newly built home that has never been lived in, the lender must get a copy of the certificate of occupancy (HUD Handbook 4000.1).
- HUD-approved counseling and a financial assessment are still required.
- Sellers and other interested parties (but not the lender) can pay up to 6% of the sales price toward closing costs, prepaid items and the upfront mortgage insurance; nothing else (HUD Handbook 4000.1). Your real-estate agent and lender should both know it's an H4P transaction from the start.
Things to watch
- You still pay property taxes, insurance, HOA dues, and maintenance on the new home.
- The loan balance grows over time, which reduces equity. See pros and cons.
- Work with a real-estate agent who has closed H4P deals before, because timelines and appraisal requirements matter.
Does the seller have to fix problems before closing?
Yes, for serious ones. If major defects threaten your health and safety or the soundness of the home, the seller must finish the repairs before a HECM for Purchase closes.
On a HECM for Purchase, the appraiser marks the report "subject to" those repairs, and the work must be done before closing (24 CFR 206.47(e)). That is different from a HECM on a home you already own, where some repairs can be finished after closing, paid from a repair set-aside of 150 percent of HUD's estimated repair cost (24 CFR 206.47(b); 24 CFR 206.19(f)(1)). If you are buying an older home, leave time in the contract to negotiate repairs with the seller.
Can you cancel a HECM for Purchase after closing?
No. The 3-day right to cancel that comes with most reverse mortgages does not apply when the loan is used to buy your home.
Federal truth-in-lending rules give most borrowers who take out a loan secured by the home they live in until midnight of the third business day after closing to cancel. A loan used to buy the home is exempt (12 CFR 1026.23(a)(3) and (f)(1)). So on a HECM for Purchase, do your checking before closing: finish counseling, compare written figures from more than one lender, and ask the lender which charges are required to get the loan and which are not. The lender must tell you (24 CFR 206.43(a)).
How is a HECM for Purchase different from paying cash?
Paying cash means no loan costs and a balance that never grows, but it uses more of your savings. A HECM for Purchase keeps more savings in your pocket in exchange for loan costs and a growing balance.
Ask yourself two questions. How much cash do you want left over after the move for emergencies, health care and other plans? And how much home equity do you want to leave to heirs? A buyer who wants the most equity left in the home usually leans toward cash. A buyer who wants to keep savings on hand and can keep up with taxes, insurance and upkeep may prefer a HECM for Purchase. A HUD-approved counselor can run both cases with you.
Rules in this section checked against the current eCFR text on October 31, 2026.
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Frequently asked questions
How much down payment do I need for a HECM for Purchase?
It varies with the youngest borrower's age, interest rates, and the home's price or value. A lender can calculate it. Older buyers generally need less down.
Can I use a HECM for Purchase on a vacation home?
No. The home must become your primary residence, typically within 60 days of closing.
Do I make monthly payments with a HECM for Purchase?
No monthly mortgage payment is required while you meet the loan terms, but you must pay property taxes, insurance, and maintenance.
Who wrote this guide
This guide is written and maintained by the Clear Reverse editorial team from the primary sources listed below. The "Last updated" date at the top shows when it last changed. Clear Reverse is an education service, not a lender or mortgage broker, and nothing here is legal, tax or financial advice. Spotted an error? Email hello@clearreverse.com. How we research and update our guides.
Sources
- HUD: HECM program page (maximum claim amount table) (lists the 2026 limit of $1,249,125, valid through Dec 31, 2026; accessed Oct 30, 2026)
- HUD Mortgagee Letter 2025-22 (2026 HECM limit) (dated Dec 11, 2025; limit applies to FHA case numbers assigned Jan 1 through Dec 31, 2026; accessed Oct 30, 2026)
- CFPB: Reverse mortgages (consumer tools) (accessed Oct 30, 2026)
- 24 CFR 206.39(b) (occupy within 60 days of closing), eCFR (current text accessed Oct 31, 2026)
- HUD Handbook 4000.1, Single Family Housing Policy Handbook (HECM sections II.B and III.B) (Update 18, issued Aug 12, 2026; accessed Oct 30, 2026)
- 24 CFR 206.47 (property standards and repairs), eCFR (current text accessed Oct 31, 2026)
- 24 CFR 206.19 (payment plans), eCFR (current text accessed Oct 31, 2026)
- 12 CFR 1026.23(f)(1) (no right to cancel on a home-purchase loan), eCFR (current text accessed Oct 31, 2026)
- 24 CFR 206.43 (cost disclosure to the borrower), eCFR (current text accessed Oct 31, 2026)
Program rules change, so confirm details with a HUD-approved counselor and a licensed lender.