Is a HECM for Purchase a fixed or adjustable rate mortgage? +
The HECM for Purchase shown on this calculator is an adjustable rate mortgage (ARM). The initial interest rate adjusts annually based on the 1-year Constant Maturity Treasury (CMT) index plus the lender's margin. Because the rate can change over time, your loan balance will grow at a variable rate — though your required monthly mortgage payment remains zero for as long as you live in the home. Fixed rate HECMs are also available as a lump-sum option — contact Renee for a personalized proposal if you'd like to compare both.
Can I use sale proceeds from my current home as the down payment? +
Yes — proceeds from the sale of your current home are one of the most common sources for the H4P down payment. The funds must come from an eligible source, which a HECM specialist can confirm for your situation.
What types of homes qualify? +
Single family homes, FHA-approved condominiums, townhomes, and 2–4 unit properties (if one unit is your primary residence) generally qualify. Manufactured homes and co-ops have different requirements.
Do I still own the home? +
Yes — you retain full ownership and title to your home, just as with any mortgage. You can sell, renovate, or pass the home to heirs. The HECM is simply a lien on the property.
What are my ongoing obligations? +
You must continue paying property taxes, homeowner's insurance, and HOA dues if applicable. The home must remain your primary residence and be maintained to FHA standards. These obligations replace the monthly mortgage payment.
What happens to my heirs? +
When the loan becomes due, your heirs have options: they can sell the home and keep any equity above the loan balance, or refinance the HECM into a traditional mortgage to keep the home. The loan is non-recourse — meaning the lender can never collect more than the home's value.
Is income verification required? +
The HECM for Purchase requires a financial assessment to evaluate your willingness and ability to pay ongoing obligations like property taxes and insurance. This is far less stringent than traditional mortgage income qualification — making it particularly accessible for self-employed buyers, retirees, and those with significant write-offs.
