HECM For Purchase

Saxton Mortgage does. At least one HECM program we offer can be used to buy a new primary residence, and you must move in within 60 days of closing. Sellers, real estate agents, builders and other interested parties can contribute up to 6% of the sales price toward loan origination fees, other closing costs and prepaid items, but the lender cannot. Repairs that threaten health and safety or the soundness of the home must be completed by the seller before closing.

Buyers who are 62 or older and will live in the home as their principal residence. Every borrower must be at least 62 by the closing date, and there is no maximum age. Everyone listed as a buyer on the sales contract must be a borrower, and our program does not allow non-occupant co-borrowers, so an adult child who will not live there cannot co-sign.

Yes. The HECM pays part of the price, and you provide the rest from acceptable sources such as cash on hand or the sale of assets you own. How much depends on the HECM’s principal limit and the sale price, so we work it out with you once there is a home in mind. The money cannot be borrowed, and sweat equity, trade equity, rent credit and premium pricing do not count.

Within 60 days of closing. That applies to every borrower and to an eligible non-borrowing spouse, if there is one. You can have only one principal residence at a time, so a HECM on your current home must be paid off before the new one can be insured.

Sellers, agents, builders and other interested parties can contribute up to 6 percent of the sales price toward loan origination fees, other closing costs and prepaid items. The lender and the broker cannot. Fees a seller customarily pays locally, such as agent commissions, and a home warranty the seller buys are not counted against the 6 percent.

Not if it is being resold 90 days or fewer after the seller acquired it. FHA’s flip waiver does not apply to HECM purchases. HUD lists a few exceptions, such as a home the seller inherited or a builder selling a newly built house, so ask us to confirm whether one applies to the home you want.

The seller must complete any required repairs before closing. A repair set-aside is not permitted on a purchase. If FHA’s review calls for a second appraisal, the lower of the two values is used, and the cost of the second appraisal can be financed as part of the closing costs.

It can be considered. A past bankruptcy does not by itself rule you out, but a waiting period applies, measured when your FHA case number is assigned. After a Chapter 7, at least two years should have passed since the discharge, and in that time you should have re-established good credit or chosen not to take on new credit. Less than two years, but not less than 12 months, may be acceptable if the bankruptcy was caused by circumstances beyond your control and you have managed your finances responsibly since. After a Chapter 13, at least 12 months of the payout period must have passed with satisfactory, on-time payments, and a case not yet discharged needs written permission from the bankruptcy court.