The Home Equity Conversion Mortgage (HECM) loan offers a higher level of home purchasing flexibility.
How? By combining the proceeds of a home sale and the most popular type of reverse mortgage.
The Home Equity Conversion Mortgage (HECM) for Purchase Loan, commonly known as H4P, is a unique financial tool designed for seniors aged 62 and older. This program allows eligible individuals to buy a new primary residence and obtain a reverse mortgage simultaneously, combining two transactions into one. The H4P is insured by the Federal Housing Administration (FHA) and offers the same benefits as a traditional HECM reverse mortgage.
Most notable of which is non-recourse loan protection, which means you or your heirs will never have to pay out of pocket to satisfy your loan. Instead, the sale of the home covers the HECM. If there is a shortage, your mortgage insurance pays the difference.
This win-win combo of greater purchasing power with no obligatory monthly payments can be a retirement gamechanger for many seniors. Many would love to move closer to family or to new low-maintenance, accessible homes, but think they can’t afford to on a fixed income. The H4P can be a great way for seniors to leverage their home equity for greater cash flow and a better quality of life.
See How She Bought Her Dream Home
If the sale of the home does not satisfy the entire loan balance, FHA mortgage insurance covers the difference. This provides a great deal of peace of mind to many people who want to increase their cash flow, but are worried about the impact of a HECM on their heirs.
Here’s Why the H4P Is So Powerful
One-Time Transaction
Combines home purchase and reverse mortgage into a single process, saving time and reducing closing costs.
Increased Purchasing Power
Enables buyers to afford a more expensive home than they might with traditional financing.
No Monthly Mortgage Payments
Eliminates the need for monthly mortgage payments, though borrowers must still pay property taxes, insurance, and maintenance.
Downsizing or Relocation
Facilitates easier downsizing or relocation to a more suitable home for aging in place.
Retained Home Equity
Allows homeowners to preserve some of their home equity while accessing it for the purchase.
FHA Insurance
Borrowers retain the title and can stay in their home as long as they meet loan requirements.
Interested in Buying a New Home with a HECM?
Whether you want to move closer to family and friends, live where you love to vacation, or have any other homebuying goals in mind, we can show you how it works.
Learn More About a Loan You’ll Love
Learn More About a Loan You’ll Love
Let’s Get Moving
Whether you’d like better cash flow, want to move closer to family or need to make your home accessible, I’m here to help.
*consult a tax/financial professional