Equal Housing Lender
Fairway NMLS #2289
Ken Powell NMLS #2656628
Most people think a reverse mortgage is only for staying put. The HECM for Purchase, or H4P, flips that: buyers 62 and older can purchase a new primary residence by bringing roughly half the price to closing, with the H4P loan funding the rest, and no monthly mortgage payment required afterward. It feels like paying cash, except you keep far more of your retirement savings.
The buyer brings a required down payment to closing, generally in the neighborhood of half the purchase price. The exact figure is determined by the youngest borrower's age, current interest rates, and the lesser of the appraised value or purchase price; older buyers typically bring less. The H4P loan funds the remainder.
From then on, no monthly mortgage payment is required. The buyer pays property taxes, insurance, HOA dues, and maintenance, lives in the home as a principal residence, and the loan is repaid when the home is eventually sold, with the same non-recourse and heir protections as any HECM.
Most H4P buyers fund the down payment with proceeds from selling their previous home. A Waldorf couple selling a paid-off colonial for $500,000 can buy a $450,000 one-level home near their grandchildren in Huntingtown, bring roughly half from the sale, keep the rest of the proceeds invested or in reserve, and carry no required monthly principal and interest mortgage payment into retirement.
Compare that with paying all cash, which empties the proceeds into the house, or a traditional mortgage, which puts a required payment on a fixed income. H4P sits deliberately between the two.
Selling the big two-story in Bowie or Clinton for a one-level home in Solomons, Leonardtown, or a 55+ community, closer to water, family, or medical care, without taking on a payment.
Moving to Southern Maryland to be near children and grandchildren, common around Pax River and Andrews families, while preserving retirement savings instead of sinking everything into the new house.
After a gray divorce, the home can be sold and each spouse can use their share of the equity with an H4P to buy a similar home, each with no required monthly payment. Ken covers this on the attorney resources page as well.
At least one buyer must be 62 or older, and the new home must become the principal residence, generally occupied within 60 days of closing. Eligible properties include single-family homes, FHA-approved condos, and certain other property types. The down payment must come from documented, allowable sources, and buyers complete the same HUD-approved counseling and financial assessment as any HECM borrower. Ongoing property charges remain the buyer's responsibility for the life of the loan.
Are you a real estate agent with a 62+ buyer or listing? See HECM for Purchase resources for real estate professionals.
No. It typically falls in a range around half the purchase price and depends on the youngest borrower's age, current rates, and the home's value or price. Older buyers generally bring less. Ken runs the exact figure for your age and target price before you shop.
Yes. An H4P purchase uses a standard contract with financing, an appraisal, and a closing much like any FHA transaction. Sellers receive full price at closing. The main differences are the counseling step and the occupancy timeline, which Ken builds into the contract dates.
The same as any HECM: the loan is repaid when the last borrower sells, moves out permanently, or passes away, heirs keep any remaining equity, and no one ever owes more than the home is worth. See the home and heirs page for the full picture.
Tell Ken your age, what your current home might sell for, and where you want to land. He will show you the H4P math next to paying cash and next to a traditional mortgage, side by side.