If you’re 62 or older, own a home with significant equity, and are thinking about moving, you may be asking a question that surprises many homeowners:
Can you actually use a reverse mortgage to buy your next home?
The answer is yes—for eligible homeowners, an FHA-insured Home Equity Conversion Mortgage for Purchase, commonly called a HECM for Purchase, can be used to purchase a new principal residence.
That can open up possibilities for homeowners who want to downsize, move into a single-story home, get closer to family, relocate within the Las Vegas area, or simply find a home that better fits the next stage of life.
I recently sat down with Kevin Fam of New American Funding’s reverse mortgage division to discuss what we’re seeing among baby boomers and older homeowners today, the misconceptions surrounding reverse mortgages, and the options homeowners may want to understand before making their next move.
One thing became clear throughout our conversation:
The goal isn’t to convince someone to get a reverse mortgage. It’s to help homeowners understand all of their options so they can make the decision that makes the most sense for them.
Why Are So Many Baby Boomers Thinking About Moving?
For many homeowners, the house that worked beautifully 20 or 30 years ago doesn’t necessarily fit their life today.
The kids may have moved out. A large two-story home may feel like more space—and more maintenance—than you want. You may want a single-story property, fewer stairs, a smaller yard, a different community, or a home closer to children, grandchildren, friends, medical care, or everyday conveniences.
I often call this right-sizing rather than downsizing.
It’s not necessarily about buying the smallest house possible. It’s about finding a home that better supports the lifestyle you want now.
For Las Vegas-area homeowners, that could mean moving from a large family home into a one-story property in Las Vegas, Henderson, Summerlin, or another community that better matches your priorities.
But this is where homeowners often get stuck.
They know they have substantial equity in their current home, but they’re unsure how to use that equity strategically.
Do you sell and pay cash for your next house?
Take out another traditional mortgage?
Stay where you are?
Invest some of the proceeds?
Help your children?
Or consider a HECM for Purchase?
Those are exactly the conversations worth having before putting your current home on the market.
What Is a HECM Reverse Mortgage?
HECM stands for Home Equity Conversion Mortgage.
It is the reverse mortgage program insured by the Federal Housing Administration, or FHA, and regulated through the U.S. Department of Housing and Urban Development.
HECMs are generally available to eligible borrowers who are 62 or older.
Unlike a traditional mortgage, a qualifying HECM borrower is not required to make monthly principal-and-interest mortgage payments while the loan remains in good standing.
That does not mean homeownership becomes free.
The homeowner is still responsible for important obligations including:
- Property taxes
- Homeowners insurance
- Maintaining the property
- Applicable HOA fees and other property-related charges
- Continuing to occupy the property as a principal residence under the program’s requirements
The loan generally becomes due when the last borrower permanently leaves the home, sells the property, or dies, subject to applicable protections for certain eligible non-borrowing spouses.
That’s why it’s important to understand the entire program—not just the phrase “no monthly mortgage payment.”
Can You Really Buy a House With a Reverse Mortgage?
Yes.
The HECM for Purchase program allows an eligible buyer age 62 or older to combine a HECM with their own funds to purchase a new principal residence in a single transaction.
This can be particularly interesting for homeowners who are selling a longtime residence with substantial equity.
Imagine, for example, that you sell your current home and have a significant amount of cash available after paying off existing liens and selling expenses.
One option would be to put all that cash into the next house.
But with a HECM for Purchase, you may be able to contribute only a portion of the purchase price from your own funds and finance the remainder through the HECM.
How much you need to contribute is not a fixed percentage.
It depends on factors that can include:
- The age of the youngest borrower or eligible non-borrowing spouse
- Current interest rates
- The home’s purchase price and appraised value
- FHA’s applicable HECM lending limit
- Other program requirements
For 2026, FHA’s nationwide HECM maximum claim amount is $1,249,125, although that does not mean every borrower can borrow that amount.
A qualified HECM lender can calculate the numbers for your specific situation.
Why Would Someone Use a HECM for Purchase Instead of Paying Cash?
This is where the conversation gets interesting.
Suppose you’ve spent decades building equity in your home. When you sell, you could potentially put every available dollar into the next property.
But should you?
There isn’t one correct answer.
For some homeowners, owning the next home outright is exactly what they want.
For others, keeping a portion of their available assets outside the home may provide greater flexibility for retirement expenses, emergencies, travel, healthcare needs, investments, or other financial goals.
A HECM for Purchase can potentially allow an eligible homeowner to:
Right-size without taking on required monthly principal-and-interest mortgage payments.
Keep more of the proceeds from the previous home available instead of putting everything into the next property.
Move closer to family or into a home better suited for aging in place.
Potentially preserve additional liquid assets for other retirement priorities.
Whether that strategy makes financial sense for you is something to evaluate with the appropriate mortgage, financial, tax, and legal professionals.
Do You Still Own Your Home With a Reverse Mortgage?
Yes.
This may be the biggest reverse mortgage misconception I hear.
Getting a reverse mortgage does not mean you’re simply handing ownership of your house to the lender.
You remain the homeowner and retain title, subject to the mortgage lien, just as a homeowner with a traditional mortgage owns a home subject to the lender’s lien.
You can also sell the home.
When the property is sold, the reverse mortgage balance and other applicable costs are paid from the transaction, and any remaining equity belongs to the homeowner.
This distinction is incredibly important because fear often comes from misunderstanding what the program actually does.
Can You Lose a Home With a Reverse Mortgage?
This question deserves a very clear answer.
A HECM eliminates the requirement to make monthly principal-and-interest mortgage payments while the loan remains in good standing, but homeowners still have obligations.
You must generally continue to:
- Live in the property as your principal residence
- Pay property taxes
- Maintain required homeowners insurance
- Keep the property adequately maintained
- Meet the other terms of the loan
Failure to meet those requirements can cause the loan to become due and could ultimately lead to foreclosure.
That’s why I would be cautious whenever someone describes a reverse mortgage simply as “a mortgage you never have to pay.”
There’s more to understand than that.
The better question is:
What are all of my responsibilities under the loan, and am I comfortable meeting them?
What are all of my responsibilities under the loan, and am I comfortable meeting them?
What Happens to the House When the Homeowner Dies?
Another common misconception is:
“If I get a reverse mortgage, my children get nothing.”
That’s not automatically true.
When the last borrower dies and no applicable deferral applies, the reverse mortgage generally becomes due.
The heirs then have options.
Depending on the circumstances, they may be able to sell the home and use the proceeds to satisfy the reverse mortgage balance. Any remaining equity after the loan and applicable selling expenses are paid belongs to the estate or heirs.
If heirs want to keep a home secured by an FHA-insured HECM, special repayment rules apply. They should contact the loan servicer promptly and obtain professional guidance regarding their options.
This is also why I believe family conversations are so important.
If your children or other heirs are concerned about a reverse mortgage, invite them into the educational process.
Let them ask questions.
Let them hear the answers directly from someone who specializes in these loans.
Sometimes the greatest fear comes from having heard that reverse mortgages are “bad” without ever learning how today’s FHA-insured HECM program actually works.
Can You Make Payments on a Reverse Mortgage If You Want To?
Yes.
Having no required monthly principal-and-interest payment doesn’t mean you’re prohibited from making voluntary payments.
A borrower can generally choose to make payments toward the loan balance.
That’s another reason education matters: homeowners should understand how different decisions affect the balance of the loan and the equity potentially remaining later.
Can You Use Home Equity to Help Your Children Buy a House?
Depending on the type of HECM and a homeowner’s circumstances, reverse mortgage proceeds may provide access to home equity that can be used for various purposes.
Some families consider using assets to help adult children with a home purchase or other financial goals.
Kevin and I discussed this concept as part of building a legacy while you’re still alive rather than thinking only about what will happen to a house after death.
There’s an emotional side to that decision.
Some parents would rather see their children benefit from financial help today—perhaps by helping them become homeowners—than wait until an inheritance occurs many years from now.
But this is an area where professional advice is particularly important.
Reverse mortgage proceeds are generally loan advances rather than earned income, but everyone’s tax and financial situation is different. Before making gifts, investing proceeds, purchasing additional real estate, or making estate-planning decisions, talk with your tax professional, financial advisor, and estate-planning attorney.
A reverse mortgage specialist and real estate professional can explain the housing and loan pieces. We should not be replacing the professionals who advise you on taxes, investments, or estate planning.
What About a HECM Line of Credit?
Some eligible homeowners may also have the option of an adjustable-rate HECM with a line of credit.
One unique feature of an unused HECM line of credit is that the available borrowing capacity may increase over time under the program’s growth feature.
That doesn’t mean the lender is paying interest on your money or that it’s an investment account.
Rather, the amount potentially available to borrow can increase according to the terms of the HECM.
For a homeowner thinking years ahead about possible future expenses, this may be another option worth discussing with a qualified HECM specialist.
Again, the appropriate strategy depends entirely on the homeowner’s age, goals, equity, financial assessment, property, interest rates, and overall retirement plan.
Is a Reverse Mortgage Right for Everyone?
Absolutely not.
And that’s one of the most important points Kevin and I discussed.
A HECM may be worth exploring for one homeowner and completely inappropriate for another.
Someone should first ask questions such as:
How long do I expect to live in this home?
Do I want to leave this particular house to my heirs?
Can I comfortably continue paying property taxes, insurance, maintenance, and other property expenses?
Would I rather keep more liquidity outside my home?
What are the costs of the HECM compared with my other options?
Could a conventional mortgage, VA loan, cash purchase, or another strategy serve me better?
What happens if I need to move into assisted living or another residence later?
How would this affect my spouse and heirs?
Those questions matter much more than whether someone simply tells you a reverse mortgage is “good” or “bad.”
The goal should be finding the option that fits your particular situation.
What Should You Do Before Deciding?
If you’re 62 or older and considering selling your Las Vegas-area home, I recommend exploring your financing options before choosing your next property.
Start with three conversations.
1. Talk with an experienced real estate professional
Determine what your current home may realistically sell for, what your likely net proceeds could look like, and what homes that meet your next-stage needs are selling for.
2. Talk with a qualified reverse mortgage professional
Ask for actual HECM for Purchase scenarios based on your age, potential purchase price, current interest rates, and financial circumstances.
Don’t rely on somebody else’s example.
Your numbers will be your numbers.
3. Involve your financial, tax, and estate-planning professionals
A home can represent one of your largest assets. Decisions about how much equity to retain, borrow against, invest, spend, or eventually leave to others deserve to be viewed as part of your larger retirement plan.
HECM borrowers also complete required counseling with a HUD-approved HECM counselor before obtaining the loan.
Planning Your Next Chapter Starts With Knowing Your Options
One of the themes Kevin and I kept coming back to during our conversation was simple:
Life changes. Your housing strategy can change with it.
The home you bought when your children were young may no longer be the home you need in retirement.
And the financial advice that made perfect sense 30 years ago may not represent every option available to homeowners today.
For some people, the right choice may be to stay exactly where they are.
For others, it may mean selling and buying another home with cash.
Some may choose conventional financing.
And for eligible homeowners 62 and older, a HECM for Purchase could be another option worth understanding.
My role as your real estate professional isn’t to tell you which financial product to choose.
It’s to ask questions, understand what you’re trying to accomplish, help you understand your housing options, and connect you with knowledgeable professionals who can explain the pieces outside my expertise.
Because the best decisions usually aren’t made by being pushed toward one option.
They’re made when you have enough good information to confidently choose for yourself.
Thinking About Right-Sizing or Moving in Las Vegas?
If you’re considering selling a longtime home, moving closer to family, finding a single-story property, or simply exploring what the next stage of homeownership could look like, I’d be happy to start the conversation with you.
We can look at what your current home may be worth, discuss what you’re looking for next, and help you identify the questions you’ll want to ask your lender and other advisors before making a decision.
The first step doesn’t have to be selling your home. It can simply be understanding your options.
Frequently Asked Questions About HECM for Purchase
Can someone over 62 buy a home with a reverse mortgage?
Potentially, yes. FHA’s HECM for Purchase program allows eligible borrowers age 62 or older to use a HECM to help finance the purchase of a new principal residence.
Do I have to make monthly mortgage payments with a HECM?
Borrowers generally do not have required monthly principal-and-interest mortgage payments while the HECM remains in good standing. However, borrowers must continue paying property taxes, homeowners insurance, applicable property charges, and maintenance expenses and must meet the loan’s occupancy and other requirements.
Does the reverse mortgage company own my home?
No. The borrower remains the homeowner and retains title to the property, subject to the mortgage lien.
Can I sell a house that has a reverse mortgage?
Yes. The HECM balance is generally paid off from the sale proceeds, and remaining equity after repayment and applicable transaction costs belongs to the homeowner.
Can my children inherit a house with a reverse mortgage?
The property can pass to heirs, but the reverse mortgage generally must then be resolved. Heirs may have options to sell the home or keep it by satisfying the HECM according to applicable FHA requirements. Families should contact the loan servicer promptly after the borrower’s death.
How much money do I have to put down with a HECM for Purchase?
There is no universal percentage. The required contribution depends on factors such as the youngest borrower’s age, interest rates, the property’s value and purchase price, and FHA program limits. A HECM lender must calculate the amount for the individual borrower.
Can I make payments on a reverse mortgage even if payments aren’t required?
Yes. Borrowers may generally make voluntary payments toward the HECM loan balance.
Is HECM counseling required?
Yes. HUD requires prospective HECM borrowers to participate in counseling with a HUD-approved HECM counselor before obtaining the loan.
Disclosure: This article is for educational purposes only and is not mortgage, financial, tax, legal, or investment advice. Reverse mortgage eligibility, proceeds, costs, interest rates, property requirements, and borrower obligations vary by individual circumstances and program rules. Consult an FHA-approved HECM lender, HUD-approved HECM counselor, and your own financial, tax, and legal professionals before making a decision.