HECM for Purchase California | Buy a Home Without Monthly Payments

What Is HECM for Purchase?

The HECM for Purchase (H4P) is a government-insured reverse mortgage that lets California seniors 62 and older buy a new primary residence using reverse mortgage financing — with no monthly mortgage payments on the new home. It combines a down payment with HECM loan proceeds so you can purchase the home you want in retirement without depleting your savings or taking on monthly payment obligations.

Mary Jo Lafaye and others talk about H4P, but few brokers actually originate them well. DiVita Home Finance has the wholesale lender relationships to find competitive H4P terms across California.

How HECM for Purchase Works

Unlike a standard reverse mortgage (which is used on a home you already own), the HECM for Purchase finances the acquisition of a new home in a single transaction:

1. You find a home you want to buy
2. You bring a down payment (typically 45–65% of purchase price, depending on your age and rates)
3. The HECM covers the remaining purchase price
4. You move in — no monthly mortgage payments required
5. The loan is repaid when you sell, move out, or pass away

HECM for Purchase vs. Traditional Purchase + Reverse

Approach	Traditional Buy + Refi	HECM for Purchase
Transactions needed	2 (purchase + reverse refi)	1 (combined)
Closing costs	Paid twice	Paid once
Monthly payments	Required during bridge period	None
Timeline	Slower, two closings	One closing, faster

Who Is HECM for Purchase Right For?

• Retirees who want to downsize in California and preserve cash
• Seniors relocating to a better climate or closer to family
• Buyers who want a nicer home than their cash would otherwise allow — using home equity from a sold property to fund the down payment
• Anyone who wants to buy a home in retirement without taking on monthly housing payments

HECM for Purchase: California Example

A 72-year-old couple sells their Marin County home for $1.8M, nets $1.4M after paying off the existing mortgage. They want to buy a $900,000 home in Sonoma County or Palm Springs and preserve the rest for retirement income.

• Estimated H4P down payment required: ~$420,000 (47% at current rates)
• HECM covers: ~$480,000
• Monthly mortgage payment: $0
• Cash remaining from sale: ~$980,000 invested for retirement

Without H4P, they’d pay $900,000 cash or take on a monthly mortgage payment. H4P lets them buy the home and keep nearly $1M working for retirement.

Eligible Properties for H4P in California

• Single-family homes
• FHA-approved condominiums
• New construction (certificate of occupancy required)
• 2–4 unit properties (borrower must occupy one unit)

HECM for Purchase Requirements

• Youngest borrower age 62+
• New home must be primary residence (must move in within 60 days of closing)
• Must complete HUD-approved reverse mortgage counseling
• Down payment must come from verified, eligible sources (cannot be borrowed)
• Property must meet FHA minimum property standards

Frequently Asked Questions

Can I use HECM for Purchase to buy in any California city?

Yes — H4P works anywhere in California as long as the property meets FHA eligibility requirements. We’ve helped clients purchase in San Francisco, Marin County, Los Angeles, San Diego, Sacramento, the Central Coast, and the desert communities.

What if I haven’t sold my current home yet?

H4P requires the new home to be your primary residence, so you’ll need to have sold (or be selling) your current home. Many clients coordinate the close of their existing sale with the H4P purchase closing. We help manage that timeline.

Does the HECM for Purchase affect my estate?

The loan is repaid from the home’s sale proceeds when you leave. Any remaining equity passes to your heirs. The non-recourse feature means heirs never owe more than the home is worth.

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