A home equity conversion mortgage (HECM) is designed by the Federal Housing Administration’s FHA reverse mortgage program. The HECM program allows homeowners to withdraw equity in the home to use at their discretion. Homeowners can choose between a fixed monthly amount or can obtain a line of credit to withdraw the funds. A HECM is often used to purchase a primary residence including closing costs.
To qualify for a HECM, you must meet the following requirements:
- Borrower(s) must be 62 years of age or older
- Purchased home is required to be your primary residence
- New property must be: single-family home, 2-4 unit dwelling, or FHA approved condo
- Must receive reverse mortgage counseling from a HUD approved counseling agency
- You must have an adequate down payment for your new home or a gift from a family member*
*The required down payment on your new home is determined on a number of factors, including your age, current interest rates, and the lesser of the home’s appraised value or purchase price.
Must participate in consumer information sessions by a HECM counselor