The HECM for purchase program (the ability to use a reverse mortgage to purchase a property) was announced by HUD months ago and it became a reality with Financial Freedom’s announcement that it has begun accepting purchase files from its wholesale partners.
Few brokers have gone through the training as of this writing but over the next month, expect the other major wholesale lenders to announce purchase programs and expect a wave of advertising from local brokers around March.
Some observers hope this program will help put a floor under property values by giving more people the option to buy a home.
That’s unlikely to be the case since the only homeowners who can use the HECM for purchase program are existing homeowners with equity. They will by and large use their funds to downsize to a smaller home rather than buy a second or larger home.