We have been getting more than just a few questions lately about the FHA HECM for Purchase program – where seniors can purchase a home using the FHA HECM reverse mortgage program.

Here is one recent question that came in from Frank who is thinking about buying a home in Queen Creek using the FHA HECM for Purchase program.

Frank’s email:

Have you actually done a FHA HECM purchase reverse mortgage? Were there any problems?
We are looking to buy a home in Queen Creek, AZ using an FHA HECM reverse mortgage, and are finding that most banks know very little about this. Contacted <bank name deleted>, and the loan officer had to go and “find out” the answer to every single question.

My reply:

Hi Frank,

Thanks for stopping by!

The HECM for Purchase program was just implemented as of January 1, 2009 – so I would be surprised if there are very many people who have completed one in America.

That said — I do have multiple customers who have been to counseling and completed the HECM for Purchase application – and are now in various stages of finding a home to buy.

The MAIN question that does not have an official answer yet is “will FHA use the appraised value or the purchase price” when calculating the value of the property.

In Arizona (an in other parts of the US as well), there are some significant deals to be had on REO property – where the property may appraise for 200,000 and the bank is willing to sell it for $125,000 – which would mean that under the HECM for Purchase program, they would be required to bring no cash to the deal and make no payments for as long as they live in the home.

When FHA first released the HECM for purchase program, they said that they would allow the appraised value to be used and NOT the sales price – but apparently there is now some confusion on that. So we are waiting for a formal Mortgagee letter from FHA to clarify that topic.

Or – at least – that is what our investors are telling us.

Ok, fire away with any questions you have, I would be happy to answer them.

Best,

Justin

Do you have questions about how the FHA HECM for purchase reverse mortgage program works?

“Fire away!”

Related Posts

• The FHA HECM Reverse Mortgage Program: What Is The HECM Reverse Mortgage Program?
• Arizona Reverse Mortgage: FHA Reverse Mortgage Loan Limits Increase
• How To Buy A House With A Reverse Mortgage: No Down Payment, No Monthly Payments. Ever.
• FHA HECM for Purchase Program: The Best Loan Ever?

If you are senior who just happens to want to live in Arizona, now is your chance to buy a house with no down payment and make no mortgage payments for as long as you live in the home.

Re-read that last part.

Buy a home in Arizona, make no down payment and make no mortgage payments for as long as you live in the home?

Correct.

FHA’s newest reverse mortgage program is called the HECM for Purchase reverse mortgage program and will allow you to do just that.

Take the following example for a 70-year-old-senior who wants to live in Sun City and finds a bank owned property that the bank is willing to accept an offer of 100,000. The property has an FHA-approved appraisal done that states its value is $170,000.  According to our FHA HECM for Purchase reverse mortgage calculator, you would need to bring no money down — and — you would not be required to make a mortgage payment as long as you live in your house!

Are you a senior who is interested in buying a home with no money down and never making a mortgage payment as long as you live in your home? A good place to start your search is by working with a Realtor who specializes in bank owned properties and can find you a property that appraises for more than the bank is willing to accept for the property.

Related Posts

• FHA HECM for Purchase Program: From The Inbox
• Arizona Reverse Mortgages: Can You Get A Reverse Mortgage That Isn’t An FHA HECM Reverse Mortgage?
• FHA HECM for Purchase Program: The Best Loan Ever?
• Seniors In Foreclosure: An FHA Reverse Mortgage May Save You

The FHA HECM for Purchase – New as of January 1, 2009

Is the new FHA HECM for Purchase program the best way to buy a house? If you are a senior, it is hard to beat.

Imagine the following scenario:

• You find a house that has an appraised value of $150,000.
• The seller is willing to sell you the house for $100,000 (not uncommon in today’s market).
• You were born on January 5, 1947 – which means that you are now 62 years old

If you were to buy a house using the FHA HECM for Purchase reverse mortgage program, you could put down $22,450 and never make another mortgage payment as long as you live in your home.

Sound too good to be true?

If you aren’t 62 or older, it is too good to be true. But if you are 62 or older, you can qualify for the HECM for Purchase program and buy a house with very little money down and never make a mortgage payment as long as you live in the home.

Interested in learning more about the program? Use this handy HECM for Purchase calculator and see how little money it takes to move into your new home using a FHA HECM reverse mortgage.

Related Posts

• Arizona Reverse Mortgage: FHA Reverse Mortgage Loan Limits Increase
• FHA HECM for Purchase Program: From The Inbox
• How To Buy A House With A Reverse Mortgage: No Down Payment, No Monthly Payments. Ever.
• Arizona Reverse Mortgages: Can You Get A Reverse Mortgage That Isn’t An FHA HECM Reverse Mortgage?