A HECM for Purchase is an FHA-insured reverse mortgage that lets homeowners 62 and older buy a new home with a large down payment, typically around 45% to 65% of the price depending on age and rates, and no monthly mortgage payment. You must still pay property taxes, insurance and upkeep, the loan balance grows over time, and it’s repaid when you sell, move out or pass away.
How it works
You put down a large share of the price, often from selling your previous home, and the reverse mortgage covers the rest. Instead of making monthly payments, interest and mortgage insurance are added to the balance. The loan is repaid from the sale of the home later. You or your heirs never owe more than the home is worth when it’s sold, thanks to FHA insurance.
Requirements
- At least one borrower aged 62 or older.
- The home must be your primary residence, occupied within 60 days of closing.
- HUD-approved counseling before applying.
- A financial assessment showing you can keep up with taxes, insurance and maintenance.
- The down payment can’t be borrowed.
Costs
- An upfront FHA mortgage insurance premium (2% of the home’s value or the lending limit, whichever is less) and an annual premium of 0.5% of the balance.
- Origination fees (capped by FHA) and standard closing costs.
- Interest that compounds on the growing balance.
Who it suits
Retirees who want to downsize or move closer to family without a monthly mortgage payment, and who plan to stay for many years. It reduces the equity left to heirs, and the balance can grow quickly.
Get independent advice
Use the required counseling to ask hard questions, involve family, and compare it with alternatives: buying a smaller home outright, a traditional mortgage, or renting. See renting vs. buying, and check costs with the true cost to buy.
Common questions
How much do I need to put down with a HECM for Purchase?
Often around 45% to 65% of the price, depending on your age and current rates.
Do I make payments on a reverse mortgage?
No monthly mortgage payments, but you must pay property taxes, insurance and maintenance.
Can my heirs owe more than the home is worth?
No. FHA insurance means the debt repaid from the sale can’t exceed the home’s value.
Updated October 2026. Educational content. OfferBacked is not currently a lender and doesn’t issue pre-approvals or loans.