"Can I Buy a Home With a Reverse Mortgage After 62? How the HECM for Purchase Works"

The offer on the home you have owned for twenty-four years came in clean, and the closing date is on the calendar. The single-level home you would like to buy, a few miles from the grandkids, costs more than the check you will walk away with. You would rather not start a monthly mortgage payment at this stage of your life. FHA has a loan built for that move. It is called a HECM for Purchase, and HECM stands for Home Equity Conversion Mortgage, which is FHA's reverse mortgage.

Yes. If everyone on the loan is 62 or older at closing, FHA's HECM for Purchase lets you buy a one-to-four unit home with a reverse mortgage and your own cash in one closing, with no monthly mortgage payment afterward. You move in within 60 days, live in one unit as your principal residence, and complete HUD-approved counseling before any fee is charged.

I'm Jeff Moran, a mortgage broker in Bluffton, South Carolina, originating since 1996, licensed in fifteen states, NMLS #483943, through C2 Financial Corporation. Reverse mortgages are part of the work I do. Every HUD rule below comes from HUD's Handbook 4000.1, in the update HUD issued on August 12, 2026, or from the HECM regulation, 24 CFR Part 206, as it read on October 28, 2026. That update dates its eligibility and HECM for Purchase sections November 10, 2026. I name the page where it matters.

The bills that come with owning a home stay with you. You pay the property taxes, the homeowners insurance, flood insurance where it is required and any association dues, and you keep the home in good repair. Since there is no monthly mortgage payment, the interest and the annual mortgage insurance premium are added to your balance every month, so what you owe grows over time. In return, the loan is non-recourse. You have no personal liability for the balance, and the lender can collect it only through a sale of the home.

How does a HECM for Purchase work?

Section II.B.8.a of HUD's handbook, on page 721, says the program was designed to let you "finance a new Principal Residence and obtain a HECM within a single transaction." Title passes to you at closing, and the HECM's liens are the only liens on the home at that point. A newly built home can work too, once it is complete and has the certificate of occupancy or the inspections HUD requires.

The price is paid from two places. The HECM covers part of it, up to an amount HUD calls the principal limit. The regulation figures the principal limit from the age of the youngest person on the loan, the expected average interest rate and the maximum claim amount. The maximum claim amount is the lowest of three figures: the home's appraised value, the price you are paying and HUD's national limit. If an eligible spouse who is not on the loan is younger, that spouse's age is the one used. You bring the rest to closing in cash, and HUD calls that cash your monetary investment.

Compared with a regular purchase loan, you put more cash in at closing and have no monthly mortgage payment afterward. If the cash is coming from the sale of the home you are leaving, the timing of the two closings matters. My article on whether to buy before you sell walks through that sequencing.

The cash you bring to closing, and where it can come from

The regulation sets the amount. Your monetary investment covers the difference between the principal limit and the sale price, plus any HECM fees you do not finance into the loan, minus the earnest money you have already deposited.

On page 739, the handbook lists the sources that can pay it, including cash from the sale or liquidation of your own assets, which covers money from selling the home you own now. It also names four sources that cannot count: "Sweat Equity; Trade Equity; rent credit; or Premium Pricing." The investment has to be real money rather than labor, a trade or a credit. You can also put in more than the minimum. The same page says you "may choose to provide a larger investment amount in order to retain a portion of the available HECM proceeds for future draws."

A seller can help with your costs, up to a ceiling. The handbook says on page 740 that sellers, real estate agents and builders can pay up to 6% of the sales price toward your loan origination fees, other closing costs, prepaid items and the up-front mortgage insurance premium. Fees the seller pays by law or local custom, real estate commissions and a seller-paid home warranty do not count against that 6%. The lender and the mortgage broker are not allowed to contribute anything, and that includes me. How seller-paid closing costs work on a regular purchase loan covers the limits for the other loan programs.

If your earnest money is more than 1% of the sales price, the handbook has the lender document where it came from. It also rules out discount points and rate buydowns on a HECM for Purchase.

Occupancy rules: age 62 and a move-in within 60 days

Everyone on the loan has to be at least 62 on the closing date, and HUD sets no maximum age. The handbook says on page 572 that a spouse who is not on the loan does not have to be 62. That spouse still goes through counseling.

Everyone on the loan, and an eligible spouse who is not on it, has to move into the home within 60 days of closing. That rule appears on page 721 of the handbook and in section 206.39(b) of the regulation. HUD calls a spouse who is not on the loan eligible when that spouse is married to you at closing, is named in the loan documents and lives in the home as a principal residence. The home has to be your principal residence, which the handbook describes as the home where you "typically spend the majority of the calendar year," and you can have only one at a time.

If you already have a HECM on the home you are selling, that loan has to be paid off before the new HECM for Purchase can be insured.

The counseling certificate comes before any fee

Counseling with a HUD-approved HECM counselor is required of everyone on the loan, of a spouse who is not on the loan, and of anyone else on title who is not on the loan. At your first contact, the lender gives you a list of approved counseling agencies, and you contact the agency yourself to schedule the session. HUD's counselor locator is where you can search for one.

Before the signed certificate arrives, the lender may take your application, give you the required disclosures, explain the program and order a few preliminary items, such as a credit report and a title search. HUD's handbook says the lender may not collect any fee, or your bank account or credit card information, until it has the certificate. If the loan never closes, you cannot be charged for those items.

The certificate is signed and dated by the counselor and by each person counseled, and it stays valid for 180 days from the date counseling was completed. On a HECM for Purchase, the handbook lets the lender take your initial application before or after counseling, so you can start the conversation with me at any point. Since a purchase contract has dates that keep running, it helps to finish counseling early.

Homes that work with a HECM for Purchase

On page 722, the handbook lists site-built homes of one to four units, condominium units in FHA-approved projects, and manufactured homes. A manufactured home has to be built on or after June 15, 1976, and classified as real estate. FHA will not insure a HECM on a co-op unit, a vacation home, a bed and breakfast or other transient housing.

A 55-and-over community's own age rule is separate from HUD's 62, and my article on buying in a 55-and-over community explains how that rule works on a conventional loan.

The seller has to be the owner of record. A home the seller acquired 90 days or fewer before your contract is not eligible, with exceptions that include an inherited home and a builder selling a newly built home. FHA draws the same 90-day line on its regular purchase loans, which my article on buying a recently flipped home with FHA explains.

Repairs needed for the safety, security and soundness of the home are the seller's to finish before closing, and a HECM for Purchase does not allow a repair set-aside for them. A repair set-aside is money held back at closing to pay for repairs finished after closing.

The 2026 HECM limit and what it caps

HUD Mortgagee Letter 2025-22 sets the national limit at $1,249,125 for January 1 through December 31, 2026, for FHA case numbers assigned on or after January 1, 2026. It is one figure for the whole country.

That $1,249,125 is a ceiling on the value the HECM is calculated from. The amount you can borrow is the principal limit, which also depends on your age and the interest rate, so it is a smaller number. On a $500,000 purchase that appraises at $510,000, the maximum claim amount is the $500,000 price. On a $1,400,000 purchase, the calculation uses $1,249,125 in 2026, even though the price is higher. Those prices are made up to show the mechanism.

If you are weighing a HECM against other ways to use your equity, my page comparing a HECM, a HELOC, a home equity loan and a cash-out refinance puts them side by side.

Buying with a HECM for Purchase, step by step

1. Everyone who needs counseling completes it with a HUD-approved HECM counselor, and the signed certificate goes to the lender.
2. We go through your price range, the principal limit on your own scenario and the cash you would bring.
3. You find a home that fits HUD's property rules, from a seller who is the owner of record.
4. Your contract lists only those on the loan as purchasers, though a spouse who is not on the loan can be listed without signing. If you sign before the lender issues its statement of the appraised value, the contract includes FHA's amendatory clause, which protects your earnest money if the appraisal comes in below the price.
5. The lender completes the appraisal and the financial assessment, which looks at your credit history, your cash flow and your residual income. Residual income is the money left over each month after your documented obligations are paid from your documented income.
6. The seller finishes any required repairs, and you close, take title and move in within 60 days.

Four things that keep a HECM purchase on schedule

Counseling finished early. The fees and the processing wait for the certificate, while your contract dates keep running.

A written plan for the cash. If your monetary investment is coming from the sale of your current home, that sale needs to close on or before the day you close on the new one.

A home that fits HUD's rules. A co-op, a vacation property, a condo without FHA approval or a home the seller has owned 90 days or fewer will not work.

Seller credits that stay within 6% of the price. HUD caps what a seller, an agent or a builder can put toward your costs at 6% of the price, so it helps to write the contract to the HECM rules from the first draft.

An illustration, with made-up numbers

The couple and the numbers below are made up to show the mechanism, and they are not an estimate of what anyone can borrow.

A couple, both 67, have their current home under contract to close on March 10. They finish HECM counseling by phone on February 2. On February 20 they sign a contract on a $500,000 condo in an FHA-approved project, with $10,000 in earnest money, and the seller agrees to pay $12,000 toward their closing costs.

  THE EXAMPLE, CHECKED AGAINST HUD'S RULES
  ------------------------------------------------
  Sale price                            $500,000
  Earnest money (over 1%, documented)    $10,000
  6% seller ceiling                      $30,000
  Seller's credit toward costs           $12,000
  Appraised value                       $505,000
  Maximum claim amount (the lesser)     $500,000
  Closing on the condo                  April 15
  Move-in deadline (60 days)             June 14

Their sale proceeds arrive on March 10, before the April 15 closing, and they move in on May 1.

Your next step

A HECM is not priced in the rate tool on this site, because the tool prices first mortgages for regular purchases and refinances. You are welcome to call me at (843) 765-0000 or email me at jeff@solverya.com. The home needs to be in one of the fifteen states where I'm licensed. If you have already finished counseling, please provide a copy of your signed counseling certificate, all pages, along with the price range you have in mind.

If you are looking in the South Carolina Lowcountry, I've written about reverse mortgages in Sun City Hilton Head and in Hardeeville. Near Charleston, the Summerville reverse mortgage page covers the 55-and-over rules, the dues and the county tax bill a HECM leaves with you.

Nothing here is a credit decision, an approval or a denial. HUD updates its handbook and its limits, so please confirm what applies to your own file.

Common questions

Can you use a reverse mortgage to buy a new home?

Yes. FHA's HECM for Purchase lets a client who is 62 or older buy a one-to-four unit home with a reverse mortgage and their own cash in one closing. The HECM pays part of the price, up to the principal limit, and you pay the rest at closing. You still pay the taxes, insurance and any association dues.

How long do I have to move in after a HECM for Purchase closes?

Sixty days. HUD's Handbook 4000.1 and 24 CFR 206.39(b) say everyone on the loan, and an eligible spouse who is not on it, must occupy the home within 60 days of closing. An eligible spouse is one married to you at closing, named in the loan documents and living in the home. It then has to be your principal residence.

Do I need counseling before applying for a HECM for Purchase?

Counseling has to be finished before the loan moves forward and before the lender can charge you any fee. The lender may take your initial application before or after counseling. Until it has the certificate, signed and dated by the counselor and everyone counseled, it cannot collect fees, process the loan or order the FHA case number.

How much cash do I need for a HECM for Purchase?

You bring the sale price minus your principal limit, plus any HECM fees you do not finance, minus your earnest money. The principal limit depends on the youngest person's age, the expected interest rate and the home's value, so the figure comes from your own scenario.

Is the 2026 reverse mortgage limit the most I can borrow?

No. HUD's 2026 national limit, set in Mortgagee Letter 2025-22, caps the home value a HECM is calculated from. The amount you can borrow is the principal limit, which also depends on your age and the interest rate.