Most people are familiar with the typical ways to buy a home: either paying in full with cash or securing a traditional mortgage. But for adults aged 62 and older, there’s a third option worth considering — the Reverse Mortgage for Purchase program, also known as HECM for Purchase.
If you’re shopping for a home in Fort Collins, Loveland, or Longmont, Colorado and finding that prices feel just out of reach, this program might be the solution. With a Reverse Mortgage for Purchase, you only need to cover the down payment — and you won’t have a monthly mortgage payment.
What Are the Requirements to Qualify?
To be eligible for a Reverse Mortgage for Purchase, you must meet the following criteria:
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Age 62 or older for all borrowers on the title (others may live in the home but do not need to meet the age requirement)
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The property must be your primary residence
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You must meet FHA’s credit and income guidelines for reverse mortgages
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You’ll need to have your “required investment” (the down payment) from a HUD-approved source — such as the sale of another home or asset, a gift, inheritance, or personal savings held for at least 90 days. Borrowed funds are not allowed.
Who Holds the Title to the Home?
You do. Just like with any traditional mortgage, the homeowner retains full ownership of the home.
What Are My Ongoing Responsibilities?
While you won’t have a monthly mortgage payment, you’ll still be responsible for:
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Property taxes
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Homeowner’s insurance
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HOA dues, if applicable
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Basic maintenance and utilities
It’s much like owning a home outright — you manage the upkeep, but no loan payments are due each month.
When Is the Loan Repaid?
The reverse mortgage becomes due and payable when:
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The last borrower passes away
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The home is sold
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The last borrower moves out for 12 consecutive months due to medical issues
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The homeowner defaults on taxes or insurance
Do I Have to Sell My Current Home?
Not necessarily. If your current home isn’t financed with an FHA loan and your down payment comes from an approved source, you can keep it. The new home must be your primary residence, and your lender will evaluate your financial ability to manage any properties you keep. Keeping your previous home as a rental, vacation home, or waiting to sell it is typically not a problem.
What Types of Properties Are Eligible?
You can use this loan to purchase:
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Single-family homes
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Townhomes
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FHA-approved condominiums
The property must be used as your primary residence.
Can I Use It to Build a New Home?
Yes! While reverse mortgages previously required a Certificate of Occupancy before the application process could begin, that changed in 2017. You can now use this program for homes under construction. Learn more here about using a reverse mortgage for new construction.
How Is the Down Payment (“Required Investment”) Calculated?
HUD determines the required investment based on:
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The lesser of the appraised value or purchase price
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The age of the youngest borrower
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The current expected interest rate
What Could Disqualify Me?
Common disqualifiers include:
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A foreclosure in the last three years
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Unresolved bankruptcy
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Outstanding federal debts, such as unpaid taxes or defaulted student/government loans
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Insufficient income to support ownership of multiple properties
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Unpaid judgments or tax liens
What Is Reverse Mortgage Counseling?
Before you can be approved for a reverse mortgage, you must complete a counseling session with a HUD-approved agency. These federally funded, nonprofit organizations work alongside lenders and the FHA to ensure that borrowers understand the terms and obligations of a reverse mortgage. The session is not meant to influence your decision — it’s there to educate and empower you to make an informed choice.
Jan and Kelsey are Reverse Mortgage Specialists serving the Erie, Dacono, Fort Collins, Loveland, Greeley, Longmont, Boulder and other Front Range areas of Colorado, as well as the Cheyenne and Laramie communities of Wyoming. Contact Jan and Kelsey to learn if a reverse mortgage is right for you.