Equity Elite Buyers Guide

Home Equity ConversionMortgage (HECM) for Purchase

The federally-insured* HECM for Purchase program, created in 2009, was designed to streamline home-buying transactions for older Americans who want to utilize a traditional HECM reverse mortgage. The HECM for Purchase combines two transactions—buying a new home and financing part of the purchase with a reverse mortgage loan. Typically, a down payment of 45% to 62% (depending on your age) † of the purchase price is combined with HECM for Purchase funds to complete the transaction. What are the program requirements? n  Eligible properties include: single-family homes, FHA-approved condominiums, townhouses or Planned Unit Developments (PUDs), and manufactured homes meeting HUD guidelines n  Your down payment cannot be borrowed funds—it must come from savings, the sale of your current house, or a gift from a family member n  You must participate in mandatory loan counseling by an independent, FHA-approved counselor to ensure that you understand the reverse mortgage process, the specific program’s details, and the individual terms of your loan n  You will need to prove adequate sources of income to assure the lender that you’ll be able to meet your ongoing loan obligations ‡ n You must be age 62 or older n The home you’re purchasing must be your new primary residence

For example: Meet Cynthia, age 71.

Due to a recent illness, Cynthia now needs to use a wheelchair, making her current two-story house unsuitable for the foreseeable future. She would like to purchase a new, ranch-style home, but with her limited savings and long-term healthcare needs, she cannot afford a monthly mortgage payment. Her Solution : With the HECM for Purchase, Cynthia can buy a more practical house while only using a portion of the cash she received from the sale of her former home. She can add more funds to her savings and be better prepared for her future healthcare needs.

* This material has not been reviewed, approved or issued by HUD, FHA or any government agency. The company is not affiliated with or acting on behalf of or at the direction of HUD/ FHA or any other government agency. † This down payment range assumes closing costs will be financed into the loan. The information being displayed is for illustrative purposes only. Actual cash required may vary and is based on age of youngest borrower, interest rate, home value, and other factors. Please contact Reverse Mortgage Funding LLC (RMF) for details about credit costs and terms. ‡ As with any mortgage, you must meet your loan obligations, keeping current with property taxes, insurance, and maintenance.

5 | Buy the Home of Your Dreams


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