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What is a HECM for Purchase Loan?

No Monthly Payments

Without the burden of a monthly mortgage payment, you can free up cash to cover other important expenses.*

​Raise Purchase Power

Use a reverse mortgage loan to improve your purchase power, and have your house pay you.

Buy the Home You Need​

Buy the home you need. Match your home to your lifestyle, or move closer to loved ones.
*You cannot lose your home under normal circumstances and so long as you pay your property taxes, homeowner’s insurance, maintenance costs and otherwise comply with the loan terms.

Our process is designed for you.

Constant online access makes accomplishing your financial and real estate goals simple and smooth.

1. Apply Online

Our online app makes your application process simple and seamless.

2. Get Your Options

A Frendly Pro will help you decide what's best for your financial goals.

3. Close Your Loan

Check the items off your to-do list, and let us do the heavy lifting to close your loan.

Who is a HECM for Purchase Loan Good For?

Reverse mortgage for purchase loans have helped older Americans nationwide purchase a home that best suits their retirement goals and lifestyle.

Maximizers

Create financial flexibility, and increase cash-flow by buying a home with no mortgage payments.

Movers

Afford the right home for your needs, using the power of a HECM for Purchase Loan.

Family Man/Woman

Use a HECM Purchase Loan to buy the home you need, and move closer to the ones you love.

Next Chapters

Move into the next chapter of your life with a home that fits your needs. Whether that means more home or less, a HECM Purchase Loan can help you maximize your decision.

Transparency is our strategy.

A quote from Frendly is one you can trust. We'll show you side by side rates and programs, so your comparison is easy to understand. 

Our pros also factor in all closing costs, so there are no surprises, and you can trust the number when comparing them to others on the market.
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​​Frequently Asked Questions

How does a HECM for Purchase Loan work?
A HECM for Purchase loan combines a reverse mortgage with the equity from the sale of your previous home – or from other savings and assets – to buy your next primary home in a single transaction. Regardless of how long you live in the home or what happens to your home’s value, you only make one initial payment toward the purchase, provided that you pay property taxes, insurance and maintain the property.
Who qualifies for a HECM for Purchase Loan?
  • You must be at least 62 years old.
  • Your new home must be your primary residence (borrowers must occupy the property within 60 days of closing).
  • You must have a sufficient down payment to purchase your new home and meet the financial requirements of the HECM program.
What are some of the features and safeguards?
The HECM reverse mortgage product has been improved over the years so that it can better meet the needs of older adults. Today, there are important safeguards in place to ensure that it can continue to help consumers for years to come.
  • You must complete reverse mortgage counseling with an independent counseling agency.
  • You must undergo a financial assessment to ensure you are able to meet the financial obligations of the loan, which includes the ability to pay your property taxes and homeowners insurance.
  • If your spouse is younger than 62, they can qualify as an eligible non-borrowing spouse and remain in the home even if you leave or pass away, so long as they continue to meet all loan obligations.*
Does the bank own my home?
No. A reverse mortgage allows homeowners to retain the title and ownership of their home for as long as they live in the home and the loan remains in good standing. Like other loans, this requires the borrower to keep up with property taxes, insurance and maintenance.
How much money can I qualify for?
The amount of money you can receive from a reverse mortgage depends on four factors:
  • Your age
  • Your home value (based on an appraisal that will be part of the loan process)
  • The interest rate of your loan
  • Your current mortgage balance (You must use the proceeds to pay off your existing mortgage.)
Will a reverse mortgage affect my Social Security, Medicare or pension benefits?
No, Social Security, Medicare or pension benefits will not be impacted. Funds from a reverse mortgage are considered loan proceeds and not income. In fact, a reverse mortgage could increase your Social Security benefits. A reverse mortgage can help delay the time you need to begin accessing Social Security, therefore increasing the amount of benefits you are eligible to receive each month. However, in some cases need-based benefits could be affected, such as Medicaid or SSI, since the proceeds from a reverse mortgage improve your monthly cash flow.
How does my loan get repaid?
A reverse mortgage is repaid when the last borrower (or even the last eligible non-borrowing spouse) leaves the house or passes away. Typically, the home is sold and the proceeds from the sale are used to pay back the loan. The heirs will receive any remaining equity. If your heirs decide to keep the home, they can pay back the loan in other ways such as by refinancing into a conventional loan.
Is there any risk of losing my home with a reverse mortgage?
Not if you fulfill the obligations of the loan, which include paying your property taxes and homeowners insurance and keeping up with basic maintenance and repairs. If you do not uphold these responsibilities, the loan may become due, and the house may be sold to pay off the loan. If you fulfill these obligations, your loan remains in good standing.
How do I receive my funds?
Reverse mortgage loan funds can be disbursed in a full or partial lump sum, as a line of credit, through monthly payments, or as a combination of any of these.
Over what time period are loan proceeds distributed?
The length of the loan depends on the way in which you choose to access the loan proceeds. You can access proceeds in one lump sum, in monthly installments for a set term or for as long as you live in the home, or in a line of credit. A Frendly home equity solutions professional will walk you through your options to determine the best fit for you.
Can I have a reverse mortgage loan on a mobile home?
In general, mobile homes are not eligible. However, some HUD-approved manufactured homes that meet FHA guidelines are eligible. You must have a HUD seal affixed to the outside of the home, which confirms that the home meets Federal Manufactured Home Construction and Safety Standards. A Frendly Pro can help you determine if your mobile home is eligible.
What can I use the funds for?
You can use the proceeds of your reverse mortgage loan for almost anything. Common uses include:
  • Paying off an existing mortgage (a requirement of the loan)
  • Paying medical bills
  • Paying off a large bill
  • Financing home repairs and renovations
  • Paying for in-home care
  • Spoiling the grandkids
Where can I receive reverse mortgage loan counseling?
Before obtaining a reverse mortgage, you must undergo reverse mortgage counseling, which can be completed over the phone in some cases. You can find a list of HUD-approved counseling agencies near you here. You may also call Frendly for a list of agencies near you.
What happens if I pass away during my loan before I receive the full amount of the loan?
If you pass away while you have a reverse mortgage loan, any funds that have not been accessed will be applied to your estate (they remain as equity in the home). When a borrower dies, heirs are given six months to either repay the loan or agree to the sale of the home. The proceeds from the sale are used to repay the loan and any remaining funds belong to the heirs.
How are my reverse mortgage fees and interest rates calculated?
The fees and interest rates of your reverse mortgage loan are tied to fixed or variable rates and based on an index and a margin. A Frendly Pro can calculate your exact fees and rates based on the loan options you choose.
Are reverse mortgages only an option of last resort?
No, this is a common misconception. In fact, when used properly as part of an overall retirement income strategy, reverse mortgages can be a smart financial planning tool. In the last several years, retirement researchers and financial advisors have begun to embrace the use of reverse mortgages in retirement income planning.
What happens if my home gains value?
If the value of your home increases, your equity increases. When you have a reverse mortgage, this means that if the home is sold to repay the loan after you pass away or decide to leave, more funds will be left over for you or your heirs. If there is a significant increase in value, you can refinance to withdraw more of the equity in the home.
What if I outlive the loan?
The loan can last for the rest of your life so long as you uphold your obligation to pay taxes and insurance and keep the home in good repair.
Can I change my mind after I close the loan?
If you change your mind within three days of closing the loan, you can cancel it. This is called the rescission period, and it gives borrowers the ability to cancel the loan without penalty. If you decide to cancel the loan after the rescission period, you can do so by paying back any proceeds you received plus the accrued interest.
*You cannot lose your home under normal circumstances and so long as you pay your property taxes, homeowner’s insurance, maintenance costs and otherwise comply with the loan terms.

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