HECM for Purchase
Borrower and Property Eligibility Requirements
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To be eligible for a HECM for Purchase loan:
- All borrowers must be 62 years or older (non-borrowing spouses allowed).
- Purchased home must be primary residence occupied within 60 days of closing.
- Property must be a single family home, 2-4 unit dwelling or an FHA approved condo.
- HUD Minimum Property standards apply to the purchased property.
- The difference between the purchase price of the new home plus closing costs and the HECM loan proceeds must be paid in cash from qualifying sources such as the sale of a prior residence, borrowers' other assets, or savings.
- Borrowers must complete a HUD approved counseling session.
- Borrowers are allowed only one FHA loan. If they have another FHA loan in place, it must be satisfied before they are eligible for a HECM loan.
- For HECM purchases, the borrowers cannot have had a foreclosure or short sale within the last three years.
- If HECM purchase borrowers own other properties, they must qualify sufficient income to maintain all properties, including the primary residence they are purchasing.
- HECM purchase borrowers are subject to HECM Financial Assessment guidelines.
More information is available at HECM for Purchase Overview.
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