FAQs - Reverse Mortgage for Home Purchase

The HECM for home purchase enables people over the age of 62 to purchase a primary residence using the money obtained from a Reverse Mortgage loan.

The program is designed to enable seniors to purchase a new primary residence and obtain a mortgage invested in a single transaction by eliminating the need for a second closing. It is also designed for customers to move to areas closer to their families, or to homes that suit their physical needs.

Homes with one to four units that have been completed in construction and are habitable. For further information, you can read Mortgage Letter 2007-06.

No. The creditor can only accept an application once the Certificate of Occupancy or equivalent has been issued.

No. Customers can only use their money or the money they get from the sale of assets. FHA prohibits the use of loans, closing cost assistance, building incentives, gifts, or personal property of any other person.

An acceptable source is a withdrawal from the customer's savings or retirement account.

No.

No. The concessions only apply to regular mortgages.

Yes.

No. These financing methods are prohibited unless the outstanding balance is to be paid off before the close of the HECM.

Yes. Even if only one spouse is going to make the invested mortgage, the creditor can obtain the credit report in order to verify the financial obligations that may put this loan at risk in the future.

Any time before the closing date. If the customer decides to cancel it, they have to notify the creditor in writing.

No. When buying the residence, the customer has to occupy the house after 60 days.

No. FHA asks these customers to consult a certified counselor who offers Reverse Mortgage and Homebuying guidance about the responsibilities of homeownership. Before signing the contract, FHA recommends that the property that will serve as collateral for the HECM be inspected. This inspection serves two purposes: (1) to determine the scale, if any, of the repairs (2) to determine if the home restoration helps the buyer renegotiate the purchase price when the property requires repair or restoration.