Most reverse mortgage conversations are about unlocking equity in a home you already own. But there's a second product that often makes more sense for retirees who want to move: HECM for Purchase, or H4P. Use a reverse mortgage to BUY your next home, not just borrow against an existing one. Roughly half down, no monthly mortgage payment for as long as you live there.
The basic math
You buy a $1,000,000 home. You bring approximately $500,000 in cash to closing (the exact down payment depends on your age — older borrowers bring less). The reverse mortgage finances the remaining $500,000. From the day you close forward, you have no monthly mortgage payment for as long as you live in the home and meet the standard obligations (property taxes, insurance, maintenance).
Who this is for
Retirees who want to:
- Right-size into a different home without depleting retirement savings to buy it outright in cash.
- Move to be closer to family while preserving liquidity for healthcare, travel, or family gifts during life.
- Downsize from a $2M home into a $1M home, walking away with $500K+ in their pocket while still owning the new home with no monthly payment.
- Avoid taking on a new traditional 30-year mortgage at retirement age — banks tighten underwriting for 70-year-old borrowers on new conventional loans.
A real Orange County example
Margaret is 74. She sold her Dana Point hillside home for $2.4M and wants to move into a single-story home in Laguna Niguel valued at $1.3M. Her options:
- Pay cash — $1.3M out of pocket. Leaves her with $1.1M from the prior sale, but ties up her largest asset in illiquid form.
- Conventional mortgage. Possible at her age but underwriting is tight, monthly payment is $5,000+, and her retirement income looks lean to underwriters.
- HECM for Purchase. Brings $650,000 cash to closing. The reverse mortgage finances $650,000. She walks away from her old home with $1.75M in liquid savings AND owns her new home with no monthly payment. The $650,000 loan accrues interest against her equity but doesn't require cash flow.
For Margaret, the H4P option preserves $1.1M of liquidity she would have spent — money that's now available for healthcare, family gifts, or simply not worrying about market downturns affecting her cash position.
What qualifies
- Borrower must be 62+ (55+ for HomeSafe jumbo H4P)
- Property must be a primary residence (cannot be a second home or investment property)
- Standard HECM property eligibility (single family, FHA-approved condos, manufactured homes meeting criteria)
- You'll go through the same HUD-required counseling as any HECM
The conversation we'd have
If you're considering a move — downsizing, relocating closer to family, or trading up to a single-story for aging-in-place — this product is usually the cleanest path. We'd talk through your specific numbers: current home value, target home, your liquidity picture, your goals for the next chapter. Sometimes H4P wins. Sometimes a traditional cash purchase is better. We'd tell you which.