The HECM for Purchase (H4P) program is a specialized reverse mortgage option that empowers seniors aged 62 and older to purchase a new primary residence. This unique program offers an excellent solution for those looking to downsize, relocate, or find a more suitable home for their retirement years while enjoying the benefits of a reverse mortgage. Here’s what you need to know about H4P:

How H4P Works

The HECM for Purchase (H4P) program allows you to use a reverse mortgage to buy a new home without the burden of monthly mortgage payments. Here’s a step-by-step overview:

  1. Sale of Current Home: You can sell your current home and use the proceeds as a down payment on the new home.
  2. Reverse Mortgage Application: Apply for a reverse mortgage through the H4P program to finance the remaining purchase price of the new home.
  3. No Monthly Mortgage Payments: With H4P, you won’t have to make monthly mortgage payments on the new home. The loan balance accumulates over time.
  4. Ownership and Residency: You retain full ownership of the new home and must make it your primary residence.
  5. Loan Repayment: The loan becomes due and payable when you move out of the home, sell it, or pass away. At that time, the loan balance, along with any accrued interest and fees, is repaid from the sale proceeds. Any remaining equity belongs to you or your heirs.

Benefits of H4P

HECM for Purchase (H4P) offers numerous advantages for seniors:

  • Downsizing: H4P enables you to downsize to a more manageable home or a location that better suits your retirement lifestyle.
  • No Monthly Mortgage Payments: Eliminating monthly mortgage payments can improve your cash flow for other expenses or leisure activities.
  • Ownership Retention: You maintain complete ownership of your new home, providing you with the peace of mind of homeownership.
  • Financial Flexibility: The funds from the sale of your previous home and the H4P reverse mortgage can be used for various purposes, including covering living expenses, medical costs, or fulfilling retirement dreams.
  • Tax Benefits: H4P proceeds are generally not considered taxable income, offering additional financial advantages.

Eligibility Requirements

To qualify for the HECM for Purchase (H4P) program, you must meet certain criteria, including:

  • Being at least 62 years old.
  • Purchasing a new home that will serve as your primary residence.
  • Completing a HUD-approved counseling session to gain a full understanding of the program’s terms and requirements.

Is H4P Right for You?

Deciding whether the HECM for Purchase (H4P) program is the right choice for your retirement goals depends on your specific circumstances and housing needs. At Senior Security Mortgage, we specialize in assisting seniors in exploring the benefits and considerations of H4P, guiding you through the application process, and providing personalized assistance.

If you’re considering a move and want to leverage the benefits of H4P, contact us today. Our team of experts is here to help you make informed decisions and find the perfect home for your retirement years.