HECM Purchase - What Are the Allowable Sources for Down Payment?
22 Dec 2023 · 1 min
0:58
A HECM purchase requires a down payment. You can use cash, retirement savings like a 401(k), proceeds from selling another home, or gifts from family members.
A HECM purchase requires a down payment. You can use cash, retirement savings like a 401(k), proceeds from selling another home, or gifts from family members.
So the down payment that's required on a reverse for purchase really has to be either your funds that you have saved, cash on hand, retirement funds, 401 can be used, things of that sort. Most commonly, the down payment funds are coming from another sale. This is where we get into these scenarios where the home is no longer accessible or meeting their needs, and they sell their house looking to purchase a new one. So you can just transfer the proceeds from that other home directly into the down payment of the new property. So that's pretty common. And you can also get a gift from family. So that's something we've seen before where a family member, you know, maybe you can't make up the down payment on your own and you've got some children that think this is best for you, or you work together with family and they can help you with the down payment. So gift from family, cash on hand, or your transfer of your equity from another property are all common uses for down payment.
