HECM for Purchase: How Arizona Seniors Buy a Home With No Monthly Mortgage Payment

Q: Do I really have no monthly mortgage payment with HECM for Purchase?

There is no required monthly principal-and-interest payment while you live in the home as your primary residence and meet the loan terms. You are still responsible for property taxes, homeowners insurance, HOA dues, and keeping the home maintained. Interest and fees accrue on the loan balance over time, so the balance grows rather than shrinks. Talk with your CPA about how it fits your overall picture.

Here's the short version: if you're 62 or older and want to buy a different home — smaller, single-story, closer to the grandkids — a HECM for Purchase lets you do it with a larger down payment and no required monthly mortgage payment. You still own the home and keep title in your name. It's one loan that handles both buying and setting up a reverse mortgage at the same time, instead of buying first and refinancing later.

It's not magic and it's not free money — it's a loan, with real responsibilities. But for the right buyer here in the White Mountains, it solves a very common problem: wanting the right house in the right place without draining every dollar of savings to get there.

What a HECM for Purchase actually is

A HECM — Home Equity Conversion Mortgage — is the FHA-insured reverse mortgage. Most people think of it as something you do to a home you already own. The "for Purchase" version lets you use one when you buy.

You bring a down payment (usually from selling your current home), the reverse mortgage covers the rest of the purchase price, and the two close together. From that point on there's no required monthly principal-and-interest payment as long as you live in the home as your primary residence and keep up your obligations. Interest and fees accrue on the balance over time, so the balance grows rather than shrinks — that's the trade-off, and I want you to see it clearly going in.

The right-sizing move it's built for

I see this all the time up here. The kids are grown, the two-story house with the big yard is more than you need, and those stairs aren't your friend anymore. Maybe you want to be in town in Show Low near the doctor, or in a 55+ community in Pinetop-Lakeside near friends and church. HECM for Purchase fits when you want to:

Go single-story. Trade the stairs for a home you can age in comfortably.
Move near family. Relocate closer to kids and grandkids without a new monthly payment eating into fixed income.
Keep cash in the bank. Instead of paying all cash for the new place, you keep a cushion for life, travel, or the unexpected.
Buy up in comfort. Sometimes the right single-story home costs a bit more than the old house sold for — this can help bridge that.

How the down payment works

The down payment on a HECM for Purchase is bigger than a regular mortgage — often somewhere in the range of roughly 45% to 70% of the price, depending on your age (older borrowers qualify for more), the home price, and current program factors. Many buyers cover the whole thing with proceeds from selling their existing home.

Here's an illustrative example only: say you sell your current home and net $300,000, and you're buying a $400,000 single-story place. A HECM for Purchase might let you put that $300,000 down, with the reverse mortgage covering the rest — leaving you no required monthly mortgage payment and no need to touch other savings. Your actual numbers will differ; the only way to know is to run them, which is exactly what I'll do with you before you go shopping.

The honest fine print — because you deserve it straight

A HECM for Purchase is a loan. That means real rules, and I'd rather you hear them from me than get surprised:

You keep title. The home is yours, in your name — the same as any mortgage.
You still owe the ongoing costs. Property taxes, homeowners insurance, HOA dues, and upkeep are still your responsibility. Falling behind on those can put the loan in default, so it needs to fit your budget.
You must be 62+ and the home must be your primary residence.
HUD counseling is required. An independent counselor walks you through it before you commit — that's a protection for you.
It's non-recourse. Neither you nor your heirs ever owe more than the home is worth when the loan is repaid.

Want the deeper dive? Read my full reverse mortgage page and my post on common reverse mortgage myths in Arizona so you can separate fact from the scary stuff people repeat.

Why a broker matters for this loan

Not every lender does HECM for Purchase, and the ones that do price and structure them differently. As an independent broker I shop 100+ wholesale lenders, so I'm matching you to the right program rather than fitting you into the one product a single bank happens to offer. And because I'm also a realtor, I understand both sides — selling your current home and buying the next one — as one connected move, not two separate headaches.

If you want to ballpark a new home budget while you think it over, my mortgage calculator is a decent starting point, though a real conversation gets you real answers.

HECM for Purchase isn't for everyone — but for a buyer who's ready to right-size and wants to protect their cash, it can be exactly the tool. Let's run your numbers and see if it fits your plan. All loans are subject to credit approval, program guidelines, and property qualification. This is not tax or financial advice — please talk with your CPA about your situation. Equal Housing Opportunity.

Written by Kristi Olson, MBA

Your White Mountains mortgage broker & realtor

Over 15 years and 1,000+ mortgages, Kristi has learned the best outcomes come from one professional who sees the whole picture. As an independent broker she shops 100+ lenders — and as a realtor and investor in 50+ properties, she understands both selling your current home and buying your next one as one connected move.

She serves Show Low, Pinetop-Lakeside, Snowflake, Taylor, and the rest of the White Mountains — NMLS #1459928, licensed in Arizona & Missouri.

More about Kristi

HECM for Purchase FAQ

Common questions about buying with a HECM

What is a HECM for Purchase?

A HECM for Purchase (Home Equity Conversion Mortgage) is a reverse mortgage that lets a buyer 62 or older combine buying a home and setting up a reverse mortgage in one transaction. You bring a larger down payment, the reverse mortgage covers the rest, and there's no required monthly mortgage payment. You keep title to the home, and you still owe property taxes, homeowners insurance, and upkeep. HUD counseling is required, and the loan is non-recourse.

Do I really have no monthly mortgage payment with HECM for Purchase?

There's no required monthly principal-and-interest payment while you live in the home as your primary residence and meet the loan terms. You're still responsible for property taxes, homeowners insurance, HOA dues, and keeping the home maintained. Interest and fees accrue on the loan balance over time, so the balance grows rather than shrinks. Talk with your CPA about how it fits your overall picture.

How big of a down payment do I need for a HECM for Purchase?

The down payment is larger than a normal mortgage — often roughly 45% to 70% of the purchase price — and it depends on your age, the home price, and current program factors. Many buyers use proceeds from selling their old home to cover it. Because the exact amount varies, the honest answer is that we run your numbers before you shop. Approval is subject to program guidelines and property qualification.

Who is HECM for Purchase a good fit for in the White Mountains?

It tends to fit buyers 62+ who are right-sizing — moving out of a large two-story home into a single-story or 55+ home, relocating closer to kids and grandkids, or moving to Show Low or Pinetop to be near friends and church. It lets you buy the home you want without tying up all your cash and without a required monthly mortgage payment. It's a loan, not a giveaway, so it should fit a real plan.