Home Equity Conversion Mortgage (HECM) for Purchase
With H4P (HECM For Purchase) you may be able to buy the home you want and have no monthly mortgage payments.* Are you 62 years or older and considering moving from your current residence? Perhaps you’re an empty nester with a home that’s become too big to manage. Maybe you’d like to relocate to be closer to your grandchildren or have been considering a condo to avoid the upkeep of your present home. Whatever the reason, we have an FHA mortgage program that may help you afford the move and free up cash.
Designed specifically for seniors 62 and older, the HECM (Home Equity Conversion Mortgage) for Purchase (H4P) is a Federal Housing Association (FHA) insured home financing program that gets you the funds you need to buy the home you want without the financial limitation and worries that are sometimes associated with a mortgage loan.
The Concept Is Simple
You make a one-time downpayment using funds from the sale of your current home, money from a checking or deposit account, or another investment combined with a HECM. With your new home as collateral, you don’t have to pay off the loan until you sell or no longer use it as your primary residence and continue to meet all loan terms.
- No monthly mortgage payment*
- You don’t pay off your loan until you sell or no longer use the home as your primary residence
- Mortgage insurance (MI) may be financed as part of your loan
- The amount you may borrow will depend on:
- Age of the youngest borrower or eligible non-borrowing spouse
- The current interest rate; and
- Lesser of appraised value or the HECM FHA mortgage limit of $625,500 or the sales price
- Borrowers must be 62 years or older
- Down payment:
- 45% to 55% of the purchase price
- Funds must come from assets already owned or; not from another loan*
- Borrowers must have the income needed, and must continue to pay, for property taxes homeowners insurance, homeowner association fees and general repair and maintenance
- Participation in a consumer information session given by a HUD- approved HECM counselor is mandatory
- You must not be delinquent on any federal debt
- Eligible properties must be your primary residence and include:
- Single family homes,
- 2 – 4 unit home with one unit occupied by borrower
- Town homes
- FHA approved condominiums
- Manufactured homes that meet FHA requirements
- Additional terms and conditions may apply.
Income, assets, monthly living expenses, and credit history will be verified. Timely payment of real estate taxes, hazard and flood insurance premiums will be verified. Closing costs, appraisal, title search, homeowner’s insurance and other closing costs will apply. Origination fee and servicing fees may also apply.
*American Financial Network, Inc. is not acting on behalf of or at the direction of HUD/FHA or the federal government. Borrowers must continue to make monthly/periodic property tax, insurance and maintenance payments, and may risk default if payments are not made. Home must be primary residence. AFN is not a tax or financial advisor. Consult a licensed tax professional and appropriate government agencies regarding deductibility of interest and other effects on taxes. Other requirements and conditions may apply. Please contact your loan representative for more information. Products not available in all areas.