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Purchasing a Home with a
HECM Reverse Mortgage

While Home Equity Conversion Mortgages (HECMs) are traditionally thought of as a refinance product, on January 1, 2009, the HECM for Home Purchase program (H4p) became available. With this program, qualifying borrowers may use an FHA insured HECM loan to purchase a home that they will use as their primary residence.

H4p Loan Amount

Your loan amount for a reverse mortgage purchase is determined by the same HUD formula used for reverse mortgage refinances. The formula considers: 1) the lesser of; the appraised value of the house, the sales price, or the current FHA 203(b) county lending limit; 2) the age of the youngest borrower; and 3) the current expected interest rate.

You are required to make a down payment. This cash investment will be the purchase price plus loan costs less the amount provided by your reverse mortgage loan. The down payment must come from your own funds.

A list of borrower and property eligiblity requirements is available here.

No Payments

As with reverse mortgage refinances, HECM home purchase loans feature no payments on the loan balance - ever - as long as at least one borrower on title lives in the home and other loan covenants are kept (such as maintaining the house and keeping your homeowners insurance and property tax payments current). And, like HECM refinances, HECM purchases are non-recourse loans, which means you (or your heirs) can never owe more than the fair market value of your home.

Specific Guidelines

The HECM for Home Purchase program has some program guidelines that are unique to the program. HUDs' HECM program guidelines prohibit any "seller concessions". Their interpretation of what qualifies as a seller concession is quite broad, forcing the buyer to pay almost all transaction costs. For more information about this program contact me.

Did you know....

Already own a primary residence, but would like to buy a second home by the kids, a vacation home in the mountains, or head south to warmer weather every winter? You can use the proceeds from a HECM refinance of your primary residence to purchase another home - or for any other financial need that you may have.


Now is a great time to check into the benefits of a reverse mortgage. Contact me today!
 
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A Non-Recourse Loan
It's Your Money
HECM for Purchase

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First Federal
Savings Bank
NMLS 402963
1880 S Eagle Rd
Meridian, ID 83642

dcook@bankfirstfed.com
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Home | HECM Basics | 12 Facts | Borrower Qualifications | Loan Process | Financial Assessment
Who Owns the Home? | Who Owns the Equity? | When is the Loan Due? | A Non-Recourse Loan | It's Your Money
| HECM for Purchase |
Copyright© 2019 Doug Cook FDIC & Equal Housing Lender Logo
HECM borrowers are responsible for the payment of property taxes, homeowners insurance, and the maintenance of their home. Rates and fees vary by lender. All credit products subject to approval. Information presented was not created or approved by HUD/FHA.
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First Federal Savings Bank | 1880 S Eagle Rd | Meridian, ID 83642
Institution NMLS: 402963

www.MortgageFirstFed.com/dcook
www.BankFirstFed.com

First Federal Savings Bank provides HECM Reverse Mortgage lending in the states of
Idaho, Oregon, Washington, Montana, Wyoming, Utah and Nevada.
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