The FHA Home Equity Conversion Mortgage (HECM) for homeowners 62 and older.
- Who qualifies: the youngest borrower is at least 62, the home is your principal residence, you have enough equity, and you can keep paying taxes, insurance and upkeep (lenders run a financial assessment).
- Required counseling: before you apply, you meet with an independent HUD-approved counselor. California also requires its own notice and an “Is a Reverse Mortgage Right for Me?” worksheet. We send you both, plus a list of counselors.
- Ways to receive funds: lump sum (fixed rate), monthly payments, line of credit, or a mix (adjustable rate).
- Costs: an upfront FHA mortgage insurance premium of 2% of the home’s value (up to the FHA limit), an annual premium of 0.5% of the loan balance, a lender origination fee capped by HUD at the greater of $2,500 or 2% of the first $200,000 plus 1% of the amount above that (maximum $6,000), and standard third-party closing costs. Figures are subject to change.
- Non-recourse: you and your heirs will never owe more than the home is worth when the loan is repaid (95% of appraised value if heirs keep the home, under HECM rules).
- Buying a home: see “Reverse Mortgage for Purchase” below.
Reverse Mortgage for Purchase
Buy your next home with a reverse mortgage
A reverse mortgage for purchase lets you buy a home that fits your next chapter, such as a single-level home closer to family, by combining a down payment with a reverse mortgage instead of paying the full price in cash. Wymac arranges reverse mortgages for purchase through both the FHA HECM for Purchase program (62+) and private (proprietary) programs (55+ with some lenders, including higher-priced homes).
- You make a down payment, and the reverse mortgage covers the rest. No monthly mortgage payment is required as long as you live in the home as your primary residence and keep paying property taxes, homeowners insurance and maintenance.
- You own the home and your name is on the title.
- Interest accrues and the balance grows over time.
- Non-recourse: you and your heirs never owe more than the home’s value when the loan comes due.
- California property tax: under Proposition 19, homeowners 55 or older (and severely disabled homeowners or victims of wildfire or natural disaster) may be able to transfer their property tax base to a replacement home anywhere in California, up to three times, if the replacement is bought within two years of selling. If the new home costs more, the difference is added to the tax base. Check with your county assessor or tax advisor.
Case study presented by Russell McDonald, Broker, Wymac Capital. Fictional case study with illustrative numbers. Not legal, tax or financial advice.
Private (proprietary) reverse mortgages are not FHA-insured HECMs and are not endorsed by HUD, FHA or any government agency. Subject to lender approval, eligibility and program terms.
See whether a reverse mortgage for purchase could work for you.
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Wymac Capital, Inc. · 346 Rheem Blvd #107, Moraga, CA 94556 (by appointment only) · Call or text 925-885-1919 · Main office 925-937-4300 · info@wymac.com
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The site’s existing HUD/FHA footer disclaimer appears on every page. Information is general and not legal, tax or financial advice. Counseling is required before applying for a reverse mortgage.