Reverse Mortgage for Home PurchaseHECM for Purchase in Utah
Buy your next home in one closing — with no required monthly mortgage payment. Designed for Utah homebuyers age 62 and older who want to right-size without draining their retirement savings.
What is a reverse mortgage for purchase (HECM for Purchase)?
A HECM for Purchase lets homebuyers 62 and older buy a new home using a large down payment plus an FHA-insured reverse mortgage, with no required monthly mortgage payment. You still pay property taxes, homeowners insurance and upkeep, and HUD-approved counseling is required before you apply.
Reviewed by Kenny Farshchian, NMLS #1639863Updated
What Is a HECM for Purchase?
A Home Equity Conversion Mortgage (HECM) for Purchase is an FHA-insured reverse mortgage that lets homebuyers age 62 and older buy a new primary residence without a required monthly mortgage payment. Instead of paying cash for the entire home, you make a one-time cash investment at closing, and the reverse mortgage covers the rest.
It's a single transaction — combining the purchase and the reverse mortgage into one closing — rather than buying with cash and applying for a reverse mortgage afterward.
Translation: You still own the home, you still pay taxes, insurance, and HOA dues — you just don't have a required monthly mortgage payment eating into your retirement income.
Key Benefits of a HECM for Purchase
No Monthly Mortgage Payment
With a HECM for Purchase, you buy your next home without a required monthly principal-and-interest payment — freeing up cash flow in retirement. You're still responsible for property taxes, homeowners insurance, and HOA dues.
Right-Size Without Draining Savings
Move to a home that fits your life now — single-story, closer to family, lower maintenance — without using all of your retirement savings or investments to do it.
FHA-Insured & Non-Recourse
A HECM is insured by the FHA. It's a non-recourse loan, meaning you or your heirs will never owe more than the home is worth when the loan becomes due, even if the balance has grown larger than the home's value.
Keep More Retirement Assets Invested
Instead of paying cash or taking a large distribution from retirement accounts, a HECM for Purchase lets you finance a portion of the new home — keeping more of your savings invested and available.
Move Closer to Family in Utah
Many Utah retirees use HECM for Purchase to relocate near children and grandchildren in Davis, Weber, or Salt Lake County, or to downsize into a more manageable home in the same community.
One Loan, One Closing
Rather than buying with cash and applying for a reverse mortgage afterward, HECM for Purchase combines both steps into a single transaction and a single closing.
What Determines Your Required Investment
Unlike a traditional down payment percentage, your required cash investment for a HECM for Purchase is calculated individually based on a few key factors:
Every scenario is different. We'll walk through your age, target purchase price, and current rates to calculate your exact required investment before you start home shopping.
HECM for Purchase Requirements in Utah
Before Approval
- Complete HUD-approved reverse mortgage counseling
- Youngest borrower or spouse is 62+
- Financial assessment of income and credit
- Determine your required cash investment
During the Process
- FHA appraisal on the home being purchased
- Property must meet FHA minimum standards
- Title and closing coordinated like a standard purchase
After Closing
- Must occupy the home as your primary residence
- Continue paying property taxes, insurance, and HOA dues
- Keep the home in good repair
Who Qualifies
HECM for Purchase Pros & Cons
- No required monthly mortgage payment for as long as you live in the home
- Combines buying and financing into a single closing
- Frees up cash and retirement assets compared to an all-cash purchase
- Non-recourse — you'll never owe more than the home is worth
- Can move to a home that better fits your needs in retirement
- Requires a larger cash investment than a traditional mortgage down payment
- Loan balance grows over time as interest and fees accrue
- You're still responsible for taxes, insurance, and maintenance
- Reduces the equity available to leave to heirs
- Not available for second homes or investment properties
When a HECM for Purchase Makes Sense
- You're 62 or older and ready to right-size your home
- You'd rather not tie up all your savings in an all-cash purchase
- You want to eliminate a required monthly mortgage payment in retirement
- You plan to stay in the new home long-term
- You're not yet 62 (a conventional or FHA loan may fit better)
- You plan to move again within just a few years
- Leaving maximum home equity to heirs is a top priority
- You'd prefer the lowest possible upfront cash investment
Frequently Asked Questions
A Home Equity Conversion Mortgage (HECM) for Purchase lets homebuyers age 62 and older buy a new primary residence using a reverse mortgage, combining the home purchase and reverse mortgage into a single transaction. You make a one-time cash investment at closing, and the reverse mortgage finances the rest — with no required monthly mortgage payment afterward.
Your required cash investment depends on your age (or your spouse's age, if younger), the purchase price of the home, and current interest rates. Generally, older borrowers can finance a larger share of the price and need a smaller cash investment. We calculate your exact number based on current rates and the home you're considering.
Yes. You hold title to the home just as you would with any mortgage. The lender places a lien against the property, similar to a traditional mortgage, but you remain the owner and retain the right to live in and sell the home.
The loan becomes due and payable when the last surviving borrower passes away, sells the home, or no longer uses it as a primary residence. At that point, the home is typically sold to repay the loan balance, and any remaining equity goes to you or your heirs. Because HECMs are non-recourse loans, neither you nor your heirs will ever owe more than the home's value.
Yes. Even though there's no required monthly mortgage payment, you remain responsible for property taxes, homeowners insurance, HOA dues (if applicable), and keeping the home in good repair. A financial assessment during the application process confirms you have the resources to keep up with these costs.
Yes. HUD requires an independent counseling session with a HUD-approved counselor before you can proceed with a HECM for Purchase. This is designed to make sure you fully understand how the program works, the costs involved, and the alternatives available before you commit.
Eligible property types include single-family homes, FHA-approved condominiums, 2–4 unit properties (as long as you occupy one unit), and certain manufactured homes that meet FHA standards. The home must become your primary residence — second homes and investment properties don't qualify.
Reverse Mortgages for Utah Retirees
We're seeing more Utah retirees in Layton, Kaysville, Ogden, and Salt Lake City use HECM for Purchase to move into single-story homes, downsize a large family home, or relocate closer to grandkids — all without draining the savings they've spent decades building.
This is a big decision. HUD requires independent counseling for exactly this reason. We'll walk you through the numbers honestly, including the trade-offs, so you can decide with confidence alongside your counselor and family.
Alternatives to Consider
Depending on your situation, you may also want to consider:
Thinking About Your Next Move?
Let's talk through whether a HECM for Purchase fits your retirement plan — no pressure, just clear numbers and honest guidance from a local Utah loan officer.