If you are 62 or older and thinking about buying your next Florida home, there is a purchase option many buyers never hear about: the HECM for Purchase. It is an FHA-insured reverse mortgage that lets an eligible buyer finance part of a home purchase with a Home Equity Conversion Mortgage, with no required monthly principal-and-interest payment as long as the loan terms are met. The trade-off is that you bring a significant amount of cash to closing, and the loan balance grows over time.
This guide explains how HECM for Purchase works, who qualifies, how to think about the cash required, and what is different when you are buying in Florida. Mortgages Done Right Inc. serves buyers across Palm Beach, Broward and Martin counties and shops more than 25 wholesale lenders. For the broader picture, see our Florida reverse mortgage overview.
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Greg Hayden can walk through your age, the home you are considering, the cash you expect to bring to closing and the alternatives, so you can decide with real numbers.
What Is a HECM for Purchase?
A HECM is the FHA-insured reverse mortgage most people mean when they say “reverse mortgage.” Most are used by homeowners to access equity in a home they already own. HECM for Purchase works differently: the loan is used to buy a new primary residence in a single transaction. You combine the proceeds of the reverse mortgage with your own funds, often from the sale of your previous home or from savings, to pay for the new home.
Because there is no required monthly principal-and-interest payment, buyers often use it to keep more of their savings and monthly cash flow available in retirement. You hold title to the home, and you remain responsible for property taxes, homeowners insurance, HOA dues if any, and upkeep. The loan is repaid later, generally when the last borrower sells, permanently moves out, or passes away.
Who Qualifies for HECM for Purchase in Florida?
Specific requirements depend on the lender and the full scenario, but the core HECM for Purchase requirements generally include:
- Age. Every borrower on the loan must be at least 62. If your spouse is younger than 62, they cannot be a co-borrower, but may qualify as an eligible non-borrowing spouse (see the FAQ below).
- Primary residence. The home must be your principal residence, and HUD’s HECM for Purchase guidance requires the borrower to move in within 60 days of closing.
- Required funds. You must bring the difference between the purchase price and the amount the HECM provides, plus certain costs, from documented, acceptable sources.
- HUD-approved counseling. You must complete HECM counseling with a HUD-approved counselor before the loan can move forward. You can search for one with HUD’s housing counselor tool or call HUD at 800-569-4287.
- Financial assessment. The lender reviews your income, credit history and ability to keep paying property taxes, insurance and other property charges.
- An eligible property. Single-family homes, townhomes and PUDs, FHA-eligible condominiums, and two- to four-unit properties where you occupy one unit can qualify. New construction can qualify once it is complete and has a certificate of occupancy. Co-ops and homes that do not meet FHA property standards are not eligible. A second home or investment property does not qualify.
How Much Cash Do You Need to Bring to Closing?
This is the question that matters most. Your required cash is the purchase price, plus closing costs, minus the HECM’s principal limit, the amount the reverse mortgage can provide on that home. The principal limit depends mainly on the age of the youngest borrower or eligible non-borrowing spouse, the expected interest rate at the time, and the home’s value up to the FHA limit. Older borrowers generally receive a larger principal limit and need less cash. Lender articles commonly describe the required investment as roughly 40% to 60% of the purchase price, but that is only a general range, and the real number for you can fall outside it.
Here is a purely hypothetical illustration of how the math works. It is not a quote, and the principal limit shown is assumed for demonstration.
| Hypothetical illustration | Amount |
|---|---|
| Purchase price | $500,000 |
| Principal limit (assumed for illustration only) | $250,000 (50%) |
| Remaining cash needed for the home | $250,000 |
| Plus: closing costs not financed, prepaid items and any reserves your lender requires | Varies |
Your actual figures depend on your age, the rate environment, the price and appraised value of the home, and the lender’s fees. Greg can run the numbers for a specific home before you make an offer.
The maximum claim amount. The FHA limit used to calculate a HECM is $1,249,125 for FHA case numbers assigned on or after January 1, 2026, according to HUD. A home priced above that can still be purchased, but the HECM calculation is capped at the limit, so you would bring more of your own money.
Where the Money Can and Cannot Come From
HUD allows the required funds to come from several acceptable, documented sources. Under HUD Mortgagee Letter 2024-06, which applies to HECM case numbers assigned on or after April 29, 2024, these can include cash on hand, cash from the sale or liquidation of your assets (such as the proceeds of your current home), HECM proceeds, interested party contributions within HUD limits, and other sources of funds that FHA accepts, which can include properly documented gifts. Sweat equity, trade equity and rent credits are not acceptable. The lender must verify and document that your funds come from an acceptable source and that there will be no outstanding or unpaid obligation left over from the purchase, so a source that leaves you owing money after closing may not work. Because lenders apply these rules differently in practice, ask Greg about your specific source of funds before you write an offer.
The seller, builder or other interested parties may be able to contribute up to 6% of the sales price, but only toward permitted items such as origination fees, other closing costs, prepaid items and the initial mortgage insurance premium. Lenders and third-party originators cannot make these contributions. Whether and how much a contribution counts toward your required investment depends on the transaction, so confirm it with Greg before it goes into the contract.
Costs and Ongoing Responsibilities
HECM for Purchase has real costs, which are typically a mix of FHA mortgage insurance premiums, an origination fee, appraisal, title and other third-party closing costs, and servicing fees. Some can be financed into the loan, which reduces what is available to you. Your Loan Estimate shows the exact amounts for your scenario, and we recommend comparing it line by line with the alternatives.
Because interest and mortgage insurance accrue on the balance, the loan balance generally grows over time and your home equity generally declines. HECMs are generally non-recourse, which means the amount owed is limited to the value of the home when the loan is repaid, under program rules. You, and eventually your heirs, should understand the repayment process. Our guides on how a reverse mortgage works and the pros and cons of reverse mortgages in Florida cover this in more detail.
Florida Considerations Buyers Should Review Early
Buying in Florida adds several costs and risks that can matter more than the loan program itself, particularly because you must keep paying them for as long as the loan is in place.
- Homeowners and flood insurance. Insurance premiums on Florida homes can be significant, and coastal homes may need wind and flood coverage. Get quotes before you commit, because insurance is part of your ongoing cost and the lender’s financial assessment.
- Condos and HOAs. Many Florida retirees buy condos. A condo must be FHA-eligible to be used with HECM for Purchase, so check the building’s status before you make an offer. Review HOA dues, reserves and the history of special assessments, which can raise your carrying costs sharply. We cover this in our guide to reverse mortgages and South Florida condo special assessments.
- Property taxes. Taxes on a newly purchased home can differ from the seller’s, so estimate them from the purchase price rather than the old bill. A Florida tax professional can answer homestead questions.
- New construction. A new home must be finished with a certificate of occupancy before closing. Confirm the timeline with the builder.
- Timing between sales. If you are selling a home to fund the purchase, the closing dates need to line up, because your funds must be documented and available and the purchase cannot leave an unpaid obligation. Plan the sequence with your agent and attorney.
When HECM for Purchase Fits, and When It May Not
HECM for Purchase may be worth a close look if you are 62 or older, plan to live in the home as your primary residence for the long term, have cash from a sale or savings to bring to closing, want to keep more monthly cash flow free in retirement, and are comfortable that the balance will grow over time. It is often considered by buyers who are downsizing, relocating to Florida to be near family, or moving into a home better suited to aging in place.
It may not be the best fit if you cannot comfortably fund the required amount without borrowing, expect to move again within a few years, or want to maximize the equity you leave to heirs. A traditional mortgage, a larger cash purchase or a smaller home may serve you better. Greg will compare the options side by side and tell you plainly if another route looks stronger.
How the Process Works
- Talk with Greg first. Before you tour homes, review your age, assets, the cash you expect from a sale, and a realistic price range.
- Complete HUD-approved counseling. This is required and helps you understand the costs, responsibilities and alternatives.
- Find the home and make an offer. Work with your agent and attorney so the contract timing and financing terms match the HECM process.
- Apply and order the appraisal. The home needs an FHA appraisal and must meet FHA property standards.
- Underwriting and financial assessment. The lender verifies your funds, credit, income, taxes and insurance.
- Close and move in. You take title, and you must occupy the home as your primary residence within 60 days of closing.
Frequently Asked Questions About HECM for Purchase in Florida
Do I have to sell my current home before I buy with a HECM for Purchase?
Not necessarily, but your required funds must come from an acceptable, documented source and be available at closing, and the purchase cannot leave you with an outstanding or unpaid obligation. Many buyers use proceeds from the sale of their current home, so the two closings need to be coordinated, and Greg can review your plan before you make an offer.
What if my spouse is younger than 62?
Every borrower on a HECM must be at least 62, so a spouse under 62 cannot be a co-borrower. They may still be treated as an eligible non-borrowing spouse if they meet HUD’s requirements, which lets them stay in the home under certain conditions after the borrower passes away or permanently leaves. HUD requires the lender to identify any non-borrowing spouse at application. An eligible non-borrowing spouse’s age is used in the principal-limit calculation when it is younger than the borrower’s, which generally reduces the amount the loan can provide and increases the cash you need. An ineligible non-borrowing spouse’s age is not used. Share your spouse’s age and whether they will be on title early, because it changes the numbers and the planning.
Can I use a HECM for Purchase on a vacation home or rental property?
No. HECM for Purchase is for a home that will be your primary residence. A two- to four-unit property can qualify if you live in one of the units.
Talk Through HECM for Purchase With Greg
Compare HECM for Purchase with a traditional mortgage or a cash purchase for the Florida home you have in mind. Free, no-pressure conversation.
HECM for Purchase is an FHA-insured reverse mortgage for borrowers age 62 and older. Terms, required funds, costs and eligibility vary by borrower, property and lender, and the loan balance generally increases over time while home equity generally decreases. HUD-approved counseling is required. The 2026 HECM maximum claim amount of $1,249,125 applies to FHA case numbers assigned on or after January 1, 2026, per HUD Mortgagee Letter 2025-22. Funding-source rules are based on HUD Mortgagee Letter 2024-06 and HUD Handbook 4000.1 and may change. Examples are hypothetical, are not a rate quote, loan approval, or commitment to lend, and were last reviewed in October 2026. Mortgages Done Right Inc. NMLS #1532755. Greg Hayden NMLS #332209.
