Yes, you can buy a house with a reverse mortgage. It is called HECM for Purchase, one FHA transaction that closes the sale and the loan together. You bring a required investment, usually 52% to 70% of the price depending on your age, and the reverse mortgage covers the rest. You own the home, and there is no monthly principal-and-interest payment. Call or text 720-449-6622.
Updated
Most people who move are not downsizing. They are upgrading.
Here is the thing nobody says out loud about downsizing. When somebody who owns free and clear finally moves, they almost never move into something cheaper. They move into something better. Single level instead of stairs. Newer, so the roof and the furnace are not a project. Closer to a daughter, or closer to a hospital, or into the neighborhood they always wanted. That house usually costs more than the one they are selling, not less.
So the plan runs into a wall. Pay all cash and every dollar of the sale is locked into the new house, which is a rough way to start retirement with no cushion. Or take a mortgage at 72 and add a payment right when the paychecks stopped.
HECM for Purchase is the third door. You put down part of the price, the reverse mortgage funds the rest, and you keep the difference in the bank. No monthly principal-and-interest payment for as long as you live there.
What it looks like with real numbers
Selling at $600,000, buying at $700,000, age 72
You own free and clear and your house sells for $600,000. The single-level place you actually want is $700,000. Paying cash means finding another $100,000 and ending up with nothing liquid.
With a HECM for Purchase at age 72, your required investment lands near 60% of the price, about $420,000. The reverse mortgage covers the remaining $280,000. You write one check at closing, you own the home, and you walk away from the table with roughly $180,000 still in your pocket and no mortgage payment.
Illustrative only, based on HUD principal limit factors at August 2026 rates. Your number moves with your age, the rate, and the property. Not an offer or commitment to lend.
How much you have to put down
The required investment is driven by the age of the youngest borrower. Older means less down, because the loan is expected to run for fewer years. There is no published HUD percentage table, so these are calculated from HUD’s principal limit factors at current rates.
| Age of youngest borrower | Roughly what you bring | On a $700,000 home |
|---|---|---|
| 62 | 65% to 70% | about $455,000 to $490,000 |
| 70 | 60% to 65% | about $420,000 to $455,000 |
| 80 | 52% to 57% | about $364,000 to $399,000 |
Two things move those numbers. Rates, because a higher expected rate lowers the principal limit and raises what you bring. And rate type, because a fixed-rate HECM at 62 can push the requirement closer to 75%. On a purchase I almost always quote the adjustable side first and show you both.
Reverse Mortgage Calculator
Let’s see what you would need to bring to the table.
A reverse mortgage is a loan. The balance grows over time and is repaid when the last borrower leaves the home. You keep the title, and you remain responsible for property taxes, homeowners insurance, and upkeep.
The rules that actually catch people
Most of HECM for Purchase is straightforward. These are the parts that derail a deal when nobody flagged them early.
| Rule | What it means for you |
|---|---|
| Age 62, every borrower | Not 55. HECM for Purchase is an FHA loan, so 62 on the closing date, with no maximum age. A spouse under 62 can be an eligible non-borrowing spouse, which is a different structure and worth going through line by line. |
| Where the money comes from | Cash, the sale of your current home, retirement accounts, stocks and bonds, the sale of other property, and documented gifts all work. Borrowed money does not. No bridge loan, no credit card advance, no seller financing. Sweat equity and trade equity are out too. |
| Move in within 60 days | The new home has to become your principal residence within 60 days of closing. This is not a vacation home or a rental. |
| Counseling comes first | HUD-approved counseling has to be finished before I can even pull an FHA case number. The certificate is good for 180 days, so start it early and it never holds up your offer. |
| Seller can help, to a point | The seller and other interested parties can contribute up to 6% of the sales price toward closing costs, prepaids and the upfront mortgage insurance. But discount points and rate buydowns are not allowed on a HECM at all, so do not let anyone write that into the contract. |
| One transaction | The purchase and the reverse mortgage close together. There is no buying it first and refinancing into a reverse mortgage later, which would cost you a second set of closing costs. |
What you can buy
Site-built homes of one to four units, as long as you live in one of them. Detached, semi-detached, townhouses and row houses. Condominiums in an FHA-approved project, and single-unit approval is available when the project itself is not on the list, which is worth asking about before you rule a building out. Manufactured homes qualify if they were built on or after June 15, 1976, carry the HUD certification label, sit on a permanent FHA-compliant foundation, and are classified as real estate.
Cooperatives do not work. Neither do vacation homes, condotels or anything transient. Full detail is on the requirements page.
What it costs
The largest single cost is FHA mortgage insurance: 2% of the maximum claim amount upfront, plus 0.5% a year on the outstanding balance. That upfront premium is what makes the loan non-recourse, meaning you and your heirs can never owe more than the home is worth. Beyond that it looks like any other closing: origination, title, appraisal, recording. Most of it can be financed into the loan, and the seller can cover up to 6%. Every fee is itemized on the costs page.
The 2026 maximum claim amount is $1,249,125. Above that, the HECM stops counting value, and some lenders offer a proprietary reverse purchase instead. Availability, minimum age and the required down payment all vary by state and lender there, so ask me before you plan around it. The types of reverse mortgages page covers the proprietary side.
The honest trade-offs
- You are still putting a large share of the sale price into the new house. This frees up part of your equity, not all of it.
- The balance grows instead of shrinking, because interest and mortgage insurance accrue on what the loan advanced. That is real, and it comes out of the equity your heirs would inherit.
- There is no monthly principal-and-interest payment. You still cover property taxes, homeowners insurance, HOA or condo dues, and upkeep, and falling behind on those is the single most common way people get into trouble.
- It rewards staying put. If you think you might move again in a couple of years, the upfront mortgage insurance will likely outweigh the benefit, and I will tell you that before you pay for an appraisal.
Who this actually fits
- You own free and clear, or nearly, and the house you want costs more than the one you are selling.
- You want to keep a meaningful cash reserve rather than sinking the whole sale into the next house.
- You are moving for a reason that is going to stick: one level, less maintenance, closer to family or care.
- You are 62 or older, and so is your spouse, or you understand the non-borrowing spouse rules.
It fits poorly if you are likely to move again soon, if the purchase would leave you thin on taxes and insurance, or if you would rather hand your heirs the house with no loan on it. Those are real reasons to say no, and I have told people so.
Frequently asked questions
Can you buy a house with a reverse mortgage?
Yes. HECM for Purchase is a single FHA transaction that closes the sale and the loan at the same table. You bring a required investment, the reverse mortgage covers the rest, and you own the home with no monthly principal-and-interest payment.
How much do you have to put down on a HECM for Purchase?
It depends on the age of the youngest borrower and current rates. At August 2026 rates, roughly 65% to 70% of the price at 62, 60% to 65% at 70, and 52% to 57% at 80. Older borrowers put down less.
What is the minimum age for a HECM for Purchase?
Every borrower must be at least 62 on the closing date, and there is no maximum age. A spouse under 62 can be listed as an eligible non-borrowing spouse. Note that this is stricter than a regular proprietary reverse mortgage, where some programs start at 55. Washington sets that floor at 60 and Texas at 62.
Can the seller pay closing costs on a HECM for Purchase?
Yes, up to 6% of the sales price toward origination fees, other closing costs, prepaid items and the upfront mortgage insurance premium. Discount points and rate buydowns are not permitted on a HECM at all, so keep those out of the contract.
Where can the down payment come from?
Cash on hand, the sale of your current home, retirement accounts, stocks and bonds, the sale of other real or personal property, and documented gifts. Borrowed money does not qualify, so no bridge loans, no credit card advances and no seller financing.
Do you still pay property taxes on a HECM for Purchase?
Yes. There is no monthly principal-and-interest payment, but property taxes, homeowners insurance, flood insurance where it applies, HOA or condominium dues, and keeping the home in good repair all stay with you.
Can you use a HECM for Purchase above the FHA limit?
The HECM counts value only up to the 2026 maximum claim amount of $1,249,125. Above that, some lenders offer a proprietary reverse purchase, though availability, minimum age and the required down payment vary by state and lender.
Authoritative sources
From the source: HUD’s HECM program, Mortgagee Letter 2025-22 for the 2026 lending limit, Mortgagee Letter 2024-06 for the seller contribution rules, and reversemortgage.org from NRMLA. For more here, see the reverse mortgage guide, how it works, the requirements, and counseling.
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About Christopher Gibson
Christopher Gibson (NMLS #1910430) is an independent mortgage and reverse mortgage broker with C2 Financial Corporation (NMLS #135622), serving homeowners across Washington, Colorado, Texas, Florida and Michigan. Because he brokers rather than works for one lender, he can quote a HECM for Purchase and a proprietary purchase side by side. Call or text 720-449-6622.
Educational content only. Not from HUD or FHA, and not approved by a government agency. You remain responsible for property taxes, insurance, HOA dues and maintaining the home. Equal Housing Opportunity.