What is a HECM for Purchase (H4P)?
A Home Equity Conversion Mortgage—also known as a reverse mortgage—for Purchase (H4P) is a Federal Housing Administration (FHA)-insured home loan that is designed to help homebuyers age 62+ to buy a new home that better meets their current lifestyle.
Insured by the Government Federal Housing Administration (FHA)
Can only get one through an FHA-approved lender
Unlock more funds for your ideal retirement home
Key benefits of HECM for Purchase.
Down payment
The product allows you to combine a down payment from your own funds (e.g., proceeds from the sale of your current home) with the proceeds from the H4P loan to complete the purchase.
The amount that you would be required to put down is roughly 40 percent to 60 percent of sales price of the home you are buying.
The required down payment is determined by the age of the youngest borrower, the current interest rates, and the purchase price of the new home.
Repayment flexibility
You have the option to repay as much or as little of the loan balance each month as you would like, or you can make no monthly mortgages payments at all.
The FHA guarantees that as long as you meet your loan obligations (which include maintaining the home and paying for property taxes and homeowners insurance), no repayment of the loan is required until the last borrower moves out or passes away.
When the loan becomes due, you or your estate has up to 12 months to repay the loan balance, which is typically achieved by selling the home.
Common uses of Reverse Mortgage.
Discover the Many Ways a Reverse Mortgage Can Help Enhance Your Retirement.