What it is
HECM for Purchase (H4P) is a specialized use of the FHA reverse mortgage program. Buyers 62 and older combine a substantial down payment (typically 45–60% of the purchase price) with a reverse mortgage, and buy the home outright with no future monthly mortgage payment.
Who it fits
- Downsizers moving into a Bloomington townhome or single-level home
- Retirees relocating from higher-cost cities
- Buyers moving into a 55+ community like Applewood Pointe or Southbridge
- Anyone who wants to preserve investment accounts by not draining cash for a full purchase
A typical Bloomington example
A couple selling a large family home in West Bloomington uses the proceeds to buy a single-level townhome for $475,000. Rather than paying all cash, they put down $250,000 from the sale, cover H4P closing costs, and finance the balance with a HECM. Result: they keep an extra $150,000 liquid, have no monthly mortgage payment, and can stay in the townhome for life.
What you're responsible for
- Property taxes
- Homeowners insurance
- HOA dues if applicable
- Reasonable home maintenance
Common questions
- Does it work for new construction? Yes, in most cases once the certificate of occupancy is issued.
- Can I move again later? Yes. You sell the home like any other, repay the reverse mortgage, and keep the remaining equity.
- Can my kids inherit the new home? Yes, with the same non-recourse protections as any other HECM.