Reverse Mortgage for Home Purchase – Realtor Guide

Information on Reverse Purchase for Realtors

Realtors | Purchase FAQs | Purchase Guidelines

updated August 2022

The HECM Reverse Mortgage Purchase is unique for each client, property and situation.
If you would like to find how the reverse mortgage purchase program can work for you or your client and the purchase price they qualify for or down payment requirement, contact Scott O’Connell at 800-489-0986.

Advantages of The Reverse Mortgage Purchase Program

The Reverse Mortgage for purchase program opens an entire new clientele for Realtors. Many seniors want to relocate but they don’t think they can because normal mortgage qualification has income requirements don’t meet their retirement income. The reverse mortgage provides a large portion of funds to go toward the purchase. Senior and Boomer buyers can get more house for their money!

If you want to increase sales, both on the selling side and the buying side, get educated on the FHA Insured HECM Reverse Mortgage for Purchase Financing.

Why are reverse mortgages so popular among seniors and boomers?

No Mortgage Payments!

The reverse mortgage lets the borrower pay the loan balance back after they leave the home permanently, and that includes interest and fees. There are no mortgage payments due as long as at least one borrower lives in the home. Over the years, interest charges and mortgage insurance continue to add to the loan balance making that balance rise over time.

Income or Credit Qualification is easier than traditional mortgages.

Because mortgage payments are not required, the lender isn’t looking for the borrower’s ability to make payments. We are looking for their ability to pay property taxes , homeowner’s insurance and HOA dues. If the buyer is keeping their existing home, perhaps turning it into a rental, they must show that they can afford supporting both properties.

• All borrower(s) must be at least 62 years old and occupy the home as primary residence within 60 days of closing.
• Single family residences only, no 2-4 unit properties allowed for the purchase program
  (2-4 unit owner occupied acceptable for refinance)
• Down payment amount is based on age of youngest owner or non-borrowing spouse, the lower of the sales price, appraised value or maximum claim amount and the expected interest rate..

Other uses of reverse mortgages by seniors and boomers:

• Parents do a reverse mortgage on their home and give money for a down payment so their children can purchase a home.
• Pay off a mortgage and live without mortgage payments for life.
• Buy out a spouse in a divorce situation
• Supplement income with monthly payments.
• Create a line of credit for future needs.

Jumbo Reverse Mortgage Purchase Guidelines

The guidelines generally follow the HUD HECM for Purchase guidelines. There are exceptions considered with strong supporting documentation. Differences include:

1. The buyer or seller is allowed to pay closing costs as specified in the contract, or as are common and customary in the market area
2. For new construction the Certificate of Occupancy (CO) must be issued prior to closing, but the loan process can start in advance of the CO.
3. Non-FHA approved Condos may be eligible if the meet spot condo guidelines.
4. A financial assessment is required for all Jumbo reverse mortgages

If you would like to know more about reverse mortgage purchase programs, please call Scott O’Connell at 800-489-0986