Plan the financing before the buyer falls in love with the next home.

A Home Equity Conversion Mortgage for Purchase can let an eligible buyer age 62 or older combine personal funds with HECM proceeds to buy a principal residence. It can remove a required monthly principal and interest payment, but it does not remove property taxes, insurance, maintenance, association dues, or the loan's other obligations.

Where the agent enters the conversation

Older homeowners are often solving more than a financing question. They may be deciding whether to downsize, move closer to family, reduce maintenance, improve accessibility, retain more liquidity than an all-cash purchase, or avoid taking on a required monthly mortgage payment.

The useful sequence is:

1. define the housing goal
2. compare cash, traditional financing, and HECM for Purchase
3. understand the buyer's required contribution and remaining liquidity
4. identify property and occupancy requirements
5. involve family and other advisors when the buyer wants them involved
6. complete required independent counseling and the lender's review
7. shop within the plan.

What a HECM for Purchase does

The buyer contributes personal funds and uses HECM loan proceeds to complete the purchase in one transaction. There is generally no required monthly principal and interest mortgage payment while the loan remains in good standing.

The loan balance usually grows as interest, mortgage insurance premiums, financed costs, and additional advances are added. The buyer keeps title and remains responsible for property charges, maintenance, and principal-residence requirements.

This is not a no-down-payment purchase. The required monetary investment can be substantial and depends on current program calculations, buyer ages and status, interest rates, the property, value, existing obligations, and transaction costs.

Three paths to compare

Pay cash

The buyer places more of the available assets into the home and has no mortgage balance, but may retain less liquidity after closing.

Use a traditional mortgage

The buyer may contribute less cash at closing but takes on a required monthly principal and interest payment, subject to qualification and program terms.

Use HECM for Purchase

The buyer generally contributes more than a traditional down payment, has no required monthly principal and interest payment, and accepts a growing loan balance, financed costs, ongoing property obligations, and likely estate tradeoffs.

The comparison needs current figures for the same buyer and the same home. A generic percentage is not enough.

Property questions to raise before the offer

A HECM for Purchase property must meet current FHA and HECM requirements and become the buyer's principal residence. Raise these items early:

• condominium project status and association facts
• manufactured-home eligibility, title, foundation, additions, and land
• new-construction and certificate-of-occupancy timing
• required repairs and property condition
• mixed use, accessory units, acreage, or unusual features
• trust, title, spouse, ownership, and occupancy structure
• insurance availability and cost
• association approval or right-of-first-refusal processes
• intended occupancy timing
• seller contributions and contract treatment.

Do not assume an issue can be solved after acceptance. Confirm the current program treatment before relying on the property or contract structure.

What the buyer still pays

The homeowner remains responsible for:

• property taxes
• homeowners insurance
• flood insurance when required
• association dues when applicable
• maintenance and repairs
• other required property charges
• compliance with principal-residence and loan obligations.

If the buyer cannot carry the home's taxes, insurance, dues, utilities, and maintenance, removing a required mortgage payment does not make the house affordable.

The people and occupancy matter

Ask early:

• Who will own the home?
• Who will live there?
• What are the ages and statuses of spouses?
• Is anyone expected to remain in the home if the borrower dies or moves?
• Is title held personally or through a trust?
• What happens if one person needs care away from the home?
• Who will handle the property and loan later?

Spouse, title, occupancy, and non-borrowing household questions can have serious consequences. A general website answer is not enough for the exact structure. Bring Nick, the HECM counselor, and appropriate legal or estate professionals into the review.

Counseling is part of the plan

People covered by HUD's HECM counseling rule must complete counseling with an independent HUD-approved counselor before the lender may fully process the application or obtain an FHA case number under the applicable process. Counseling explains the loan, costs, obligations, and alternatives. The certificate confirms completion; it is not loan approval and does not say the loan is suitable.

The agent should treat counseling as a protection and scheduling dependency, not as a sales hurdle.

What I provide to the agent

With the buyer's permission and through the approved process, I can provide:

• current program and property guidance
• an estimated buyer contribution and transaction-cost framework
• comparisons with cash and traditional financing
• an explanation of payment-plan and balance-growth mechanics
• a list of property, spouse, title, occupancy, and funding questions
• timing dependencies for counseling, appraisal, underwriting, and closing
• factual listing-side lender communication
• documented assumptions and open items.

I do not provide legal, tax, real estate, investment, insurance, benefits, appraisal, inspection, or estate advice.

What I need from the agent

For an early de-identified review:

• approximate buyer age or age range
• spouse or household structure at a high level
• target area and property type
• estimated price range
• approximate available contribution range
• current home sale or payoff question
• target timing
• the housing problem the buyer wants to solve
• known property or contract concern.

Do not send client names, contact information, dates of birth, account balances, documents, Social Security numbers, or other sensitive information through the scenario contact page.

Offer checklist

• □ Buyer and household structure reviewed
• □ Required contribution estimated with current assumptions
• □ Cash source and timing reviewed before funds move
• □ Counseling status and timing identified
• □ Property type and project eligibility raised
• □ Occupancy timing discussed
• □ Seller-paid items reviewed under current program rules
• □ Appraisal and property requirements explained
• □ Taxes, insurance, dues, and maintenance included in affordability
• □ Family, estate, care, and relocation questions invited
• □ Cash, traditional financing, and HECM compared
• □ No one promised proceeds, value, eligibility, approval, or closing

Common agent questions

How much does the buyer have to contribute?

It requires a current individual calculation. Age, rates, eligible value, program limits, property, costs, and other facts matter. Do not advertise a fixed percentage.

Can the buyer use gift funds?

Do not assume a funding source is acceptable. Current HECM for Purchase rules govern the buyer's monetary investment and documentation. Confirm the source before the buyer moves or relies on funds.

Can the seller pay closing costs?

Seller contributions and interested-party payments are subject to current FHA and transaction rules. Review the proposed contract and costs before promising treatment.

Can the buyer purchase before selling the current home?

Possibly, but qualification, liens, available funds, occupancy, timing, and the broader plan all matter. It requires an individual review before the contract is written.

Is there a required monthly payment?

There is generally no required monthly principal and interest payment. The homeowner must still pay property charges and meet all loan obligations. Voluntary payments may generally be made under HECM rules.

Bring me the housing question and rough numbers first.

I will follow up with the agent, not a client named in an initial message. If a joint conversation is appropriate, it happens with the buyer's permission and through the approved process.

This page is general information for real estate professionals. It is not a recommendation, loan approval, commitment to lend, promise of proceeds, property-eligibility decision, or legal, tax, estate, benefits, investment, insurance, appraisal, inspection, or real estate advice. HECM requirements, calculations, costs, and available options can change. Eligibility and fit require an individual review and required independent counseling. All loans are subject to application, documentation, underwriting, credit, and property approval. Not all applicants or properties will qualify.

Nick Cunningham · Loan Officer · NMLS #907393 Mortgage services provided through Golden Bay Mortgage Group · NMLS #1403489 · Licensed in California · Equal Housing Opportunity.