HECM for Purchase in California: Buying a Home With a Reverse Mortgage at 62+

By Matthew Martinez, Founder, CEO & Managing Broker, Diamond Real Estate Group. California DRE #01869679.

A HECM for Purchase is an FHA-insured reverse mortgage that lets a buyer whose youngest borrower is 62 or older buy a new principal residence with one loan and no required monthly mortgage payment. You pay a large down payment from your own cash or sale proceeds, the reverse mortgage covers the rest, and you must move in within 60 days of closing. You still pay property taxes, insurance and upkeep, the loan balance grows over time, and counseling with a HUD-approved counselor is required before you apply.

It is often used by owners who are downsizing or moving closer to family and want to buy outright-style without draining all their cash. Below are the federal rules, the costs, and the California-specific steps.

How a HECM for Purchase works

A standard Home Equity Conversion Mortgage (HECM) lets an owner borrow against a home they already own. The purchase version combines buying and borrowing in one closing:

1. You sell your current home (or use savings) to fund the required cash investment.
2. The HECM lender advances the rest of the purchase price, plus financed costs, at closing.
3. You take title, and the HECM is the only lien on the property.
4. No monthly principal and interest payments are required. Interest and fees are added to the balance, which is repaid when the loan comes due, usually when the last borrower sells, moves out or dies.

The CFPB’s overview, What is a reverse mortgage?, stresses that the balance rises and your equity falls over time, and that heirs who want to keep the home generally must repay the loan, often by selling.

Eligibility at a glance

The maximum claim amount changes each year. Check HUD’s current announcement before you rely on it; the 2025 figure was $1,209,750.

The counseling requirement

Counseling comes before the loan, not after. Under 24 CFR 206.41, the lender must give you a list of HUD-approved HECM counselors at first contact, and the counselor must cover the topics federal law requires, including alternatives. HUD’s HECM page lists a toll-free number, (800) 569-4287, to find a counselor. The CFPB notes that the agency may charge a reasonable fee but cannot charge if you cannot afford it.

California adds its own steps. Under Civil Code section 1923.2, before accepting a final application a lender must give you a list of at least 10 HUD-approved counseling agencies that are not paid by the lender, counseling is in person unless you choose otherwise, and the lender cannot accept an application or charge fees until seven days after counseling is completed. Civil Code section 1923.5 requires a large-type plain-language notice and a reverse mortgage worksheet guide. The guide asks you to think through effects on others living in the home, default risk from unpaid taxes or insurance, less costly alternatives, and effects on public benefits including Medi-Cal recovery. You and the counselor sign it, and the lender cannot approve the loan until it has the signed guide.

Plan the seven-day wait into your purchase timeline. If you are writing an offer, counsel early.

The down payment and source of funds

How much the HECM covers depends on the youngest borrower’s age, the interest rate and the value (capped at the maximum claim amount), so the required cash varies. Your lender calculates it; we do not estimate it here.

HUD’s HECM for Purchase guidance, Mortgagee Letter 2008-33, says the cash investment must come from cash on hand or from selling or liquidating your assets, and that lenders must verify the funds. It bars borrowed money for this purpose, including bridge or gap loans, subordinate liens, personal loans, credit card cash advances and seller financing. In practice that usually means selling your current home first or using savings, not a bridge loan.

If you need to sell before you buy, our home sale contingency and seller rent-back guides explain how to sequence it.

Property standards

Under 24 CFR 206.45 and the lender’s FHA appraisal:

• Property type: a one-family dwelling, or more units where HUD allows, and one-family condominium units. ML 2008-33 describes eligible purchases as one- to four-family dwellings and lists cooperatives, boarding houses, bed and breakfasts, and manufactured homes built before June 15, 1976 among ineligible types; post-1976 manufactured homes must meet safety standards and sit on a permanent foundation.
• Title: fee simple or a qualifying long-term leasehold, with lender title insurance; see title insurance in California.
• Flood: flood insurance is required for improvements in a FEMA special flood hazard area in participating communities; see flood zones in the North Bay.
• Condition: the home must meet FHA property standards, and the lender will identify required repairs.
• Condos: ask the lender early whether the specific project is acceptable for FHA financing.

Costs

Financing these costs reduces how much of the price the HECM can cover, which raises your cash investment. Ask for a written comparison from more than one FHA-approved lender. We do not quote rates.

California considerations

• Keep paying property charges. Failing to pay taxes or insurance can make the loan come due, per the CFPB. Budget for the supplemental tax bill that follows a purchase.
• Property tax base transfer. Owners 55 or older may be able to transfer their assessed value to a replacement home anywhere in California under Proposition 19, within two years before or after selling, according to the Board of Equalization. See our Prop 19 base-year transfer guide.
• Insurance in fire-prone areas. Hazard insurance is a loan requirement. In parts of Sonoma, Napa, Marin, Lake and El Dorado counties, coverage can take time to secure; see the California FAIR Plan for homebuyers.
• Deed of trust notice. California requires the first page of the deed of trust to state that it secures a reverse mortgage, under Civil Code 1923.2.
• Manufactured homes. If you are considering a manufactured home, confirm the age, foundation and title status meet FHA rules before you write an offer. See Sonoma County mobile and manufactured homes.
• Estate planning. Talk with your attorney about how the loan will be repaid and what heirs should expect.

Questions people ask

Can you buy a house with a reverse mortgage in California?

Yes. The FHA’s HECM for Purchase lets buyers whose youngest borrower is 62 or older buy a principal residence, provided they make the required cash investment and meet counseling, occupancy and property rules.

How much down payment do I need for a HECM for Purchase?

It depends on the youngest borrower’s age, the interest rate and the home’s value up to the maximum claim amount. The lender calculates it; the funds must come from cash on hand or sale of assets, not borrowed money.

Can I use a bridge loan for the down payment?

No. HUD’s HECM for Purchase guidance bars bridge or gap loans, subordinate liens, personal loans, credit card advances and seller financing as the source of the cash investment.

How soon do I have to move in?

Within 60 days of closing, under 24 CFR 206.39(b), and the home must remain your principal residence.

Is counseling required in California?

Yes, federally and under state law. California also requires in-person counseling unless you elect otherwise, and a seven-day wait after counseling before a lender can accept the application or fees.

What is the HECM limit for 2026?

HUD set the maximum claim amount at $1,249,125 for FHA case numbers assigned on or after January 1, 2026. Check HUD for the current figure.

Do I still pay property taxes with a reverse mortgage?

Yes. You must pay property taxes, homeowners insurance and maintain the home, or the loan can come due.

Can my spouse stay if they are under 62?

Federal rules include eligible non-borrowing spouses, who must also attend counseling. Protections depend on how they are documented at closing, so review this with your counselor and lender.

Sources & notes

1. Electronic Code of Federal Regulations, 24 CFR Part 206: sections 206.33 (age) and 206.41 (counseling).
2. 24 CFR 206.39 and 24 CFR 206.45, via Cornell LII: 60-day occupancy, eligible properties, HECM for Purchase lien and completion rules.
3. HUD Mortgagee Letter 2008-33, HECM for Purchase: source of funds and property types. Later FHA handbook updates may refine these; confirm with your lender.
4. HUD, FHA announces 2026 loan limits (Dec. 11, 2025).
5. HUD, Home Equity Conversion Mortgages: counseling, MIP.
6. CFPB: What is a reverse mortgage?, eligibility, costs, reverse mortgage resources.
7. California Civil Code 1923.2 and 1923.5, text via California Public Law; official versions are on leginfo.legislature.ca.gov.
8. California State Board of Equalization, Proposition 19.

General information, not legal, tax or lending advice. Updated November 2026. Primary sources are linked in this guide.

Related: Downsizing in the North Bay · Prop 19 base-year transfer · Buy with Diamond · Contact us