Reverse Mortgage for Purchase Loan (H4P)

The Financing You Need to Buy the Home You Really Want in Retirement

If you are 62 or older, you may be considering a new home that better fits your retirement lifestyle. Whether you want to move closer to family, enjoy a home that accommodates aging comfortably, or live near the ocean, a Reverse Mortgage for Purchase (H4P) could be the solution.

You might think that buying your dream home means draining your savings or taking on monthly payments. But with a HECM for Purchase loan, you can access flexible financing that offers distinct advantages over traditional mortgages or paying cash.

A couple sitting together on a white background.

What is a HECM for Purchase (H4P)?

A Home Equity Conversion Mortgage (HECM) for Purchase is a Federal Housing Administration (FHA)-insured home loan designed to help buyers age 62+ purchase a new primary residence. It can increase your purchasing power while eliminating monthly mortgage payments.*

Benefits of an H4P Loan:

  • Increase purchasing power: Afford the home you really want.

  • Free up cash flow: No monthly mortgage payments (home maintenance, taxes, and insurance are still required).

  • Extend retirement assets: Preserve savings for other needs.

  • Minimal income and credit requirements: Easier qualification compared to traditional loans.

Eligibility Requirements:

  • Must be 62 years or older.

  • Meet minimal credit and property requirements.

  • Complete reverse mortgage counseling from a HUD-approved agency.

  • Not be delinquent on federal debt.

  • Home must be a primary residence and meet FHA property standards.

Eligible Properties:

  • Single-family homes.

  • 2- to 4-unit dwellings.

  • FHA-approved condos.

How Does It Work?

Down Payment:

Repayment Flexibility:

You’ll combine a down payment from your funds (e.g., proceeds from selling your current home) with the H4P loan. Typically, the required down payment is 40% to 60% of the home’s purchase price. The exact amount depends on:

  • Age of the youngest borrower.

  • Current interest rates.

  • Purchase price of the new home.

You choose how much to pay monthly or opt for no monthly mortgage payments. The loan is due when the last borrower moves out or passes away. At that time, you or your estate has up to 12 months to repay the balance, usually by selling the home.

Real-Life Scenarios:

Upsizing:

Alex (62) and Janet (59) want to move into a new home for retirement, but home prices are double in the new community. With a reverse mortgage for purchase, they could:

  • Sell their current home for $391,400.

  • Buy a $600,000 newly constructed home.

  • Keep their monthly payments at $0 while preserving cash flow.

Downsizing:

Carol (62) wants to downsize and move closer to her grandchildren while setting up an annuity for their college fund. With a reverse mortgage, she could:

  • Sell her $400,000 home.

  • Buy a $375,000 home.

  • Keep $170,000 to invest in her grandchildren’s future.

Frequently Asked Questions

Can a reverse mortgage be used to purchase a home?

Yes. You can buy a new primary residence by putting as little as 45% to 65% down. The rest is funded by the H4P loan.

Yes! The borrower retains ownership of the home. The loan is simply secured with a lien, just like a traditional mortgage.

Since there are no required monthly payments, the down payment is higher upfront to offset that cost.

Yes, you can make voluntary prepayments toward the balance at any time.

Yes. You can apply before the home is complete, but the appraisal and closing cannot happen until the Certificate of Occupancy is issued.

You may be able to close in as little as 15 days if a non-contingent appraisal is received within 10 days.

Is a Reverse Mortgage for Purchase Right for You?

An H4P can help you upsize, downsize, or right-size into your ideal retirement home while keeping more money in your pocket. Every situation is unique, so it’s essential to work with a reverse mortgage professional to determine if this is the right fit for you.

Get Started Today!

Take control of your financial future with a Reverse Mortgage. Contact us today for a FREE, no-obligation consultation and see how much you can qualify for.

 

📞  Call us at (808) 517-6416
📩  Request a free Reverse Mortgage Guide – elias@c2hawaii.com

 

Your home has been your greatest asset—now let it work for you!

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