Home Equity Conversion Mortgage (HECM)

What Is a HECM?

A Home Equity Conversion Mortgage is a reverse mortgage insured by the Federal Housing Administration (FHA). Unlike a traditional mortgage where you make monthly payments to a lender, a HECM allows qualified homeowners to access their home equity without selling their home.

You remain the owner of your home while maintaining responsibility for:

• Property taxes
• Homeowners insurance
• Home maintenance
• Occupancy requirements

The loan becomes due when the last borrower permanently moves out, sells the home, or no longer meets the loan obligations.

Benefits of a HECM

Eliminate Monthly Mortgage Payments

If you have an existing mortgage, a HECM can be used to pay it off, potentially eliminating your required monthly mortgage payment.*

Access Tax-Free Cash

Receive your funds as:

• Lump sum
• Monthly payments
• Line of credit
• Combination of payment options

(Consult your tax advisor regarding your individual situation.)

Stay in the Home You Love

Continue living in your home while maintaining ownership.

Flexible Financial Freedom

Use your funds however you choose, including:

• Supplement retirement income
• Home improvements
• Medical expenses
• Debt consolidation
• Travel
• Emergency savings

Federally Insured

HECM loans are insured by the FHA and include important consumer protections, including non-recourse provisions, meaning neither you nor your heirs will owe more than the home's value when the loan is repaid.

Who Qualifies?

General eligibility requirements include:

• At least one borrower must be age 62 or older
• Own your home or have significant equity
• Live in the home as your primary residence
• Meet FHA financial assessment guidelines
• Complete HUD-approved counseling before closing

Eligible property types may include:

• Single-family homes
• FHA-approved condominiums
• Certain manufactured homes
• Two-to-four unit properties where one unit is owner occupied

How Can You Receive Your Money?

Choose the option that best fits your retirement goals.

Line of Credit

Access funds only when you need them. Any unused available credit may grow over time, providing additional borrowing capacity.

Monthly Income

Receive predictable monthly payments to supplement retirement income.

Lump Sum

Receive available proceeds at closing to meet larger financial needs.

Combination Plan

Customize your loan with a mix of payment options.

Common Uses for a HECM

Many homeowners use a reverse mortgage to:

• Pay off an existing mortgage
• Due to divorce
• Children moving back in
• Increase monthly cash flow
• Delay Social Security benefits
• Cover increased healthcare costs
• Remodel or age in place
• Create an emergency financial reserve
• Help preserve retirement investments during market downturns
• Improve overall retirement confidence

HECM for Home Purchase

Did you know you can purchase a new home using a HECM?

The HECM for Purchase program allows eligible borrowers to buy a new primary residence with a substantial down payment while eliminating required monthly mortgage payments.*

This can be an excellent option for retirees looking to:

• Downsize
• Move closer to family
• Purchase a more accessible home
• Relocate for retirement

Frequently Asked Questions

Will I still own my home?

Yes. You remain the homeowner as long as you meet the loan obligations.

Can I lose my home?

You must continue to live in the home as your primary residence, maintain the property, and stay current on property taxes and homeowners insurance.

What happens when I leave the home?

The loan becomes due when the last borrower permanently leaves the home. The home may be sold to repay the loan, or heirs may choose to refinance or pay off the balance if they wish to keep the property. Keep in mind the loan is non recourse so if value drops we can arrange for different options.

Will my children inherit debt?

No. HECM loans are non-recourse loans. If the home sells for less than the loan balance, neither your estate nor your heirs are responsible for the difference.

Is counseling required?

Yes. HUD requires independent counseling before the loan can close to ensure borrowers fully understand the program.

Why Work With Us?

We understand that a reverse mortgage is one of the most important financial decisions you'll make.

Our experienced specialists take the time to:

• Explain every option clearly
• Answer all your questions
• Compare alternatives
• Provide personalized retirement financing strategies
• Guide you from consultation through closing

Our goal is to help you make an informed decision with confidence.