Reverse Mortgage Purchase Calculator

How Much Down Payment H4P Actually Requires

There's no flat percentage written into the H4P rules. Instead, HUD calculates the maximum amount you can finance — the "principal limit" — from a formula (the Principal Limit Factor, or PLF) built on three inputs: the age of the youngest borrower on the loan, the expected interest rate at closing, and the lesser of the purchase price or the FHA HECM lending limit. Your required down payment is simply the difference between the purchase price plus closing costs and that principal limit. The older the youngest borrower and the lower the rate, the higher the principal limit and the smaller the down payment needed — because HUD is effectively projecting a shorter or slower balance-growth period before the loan is expected to come due.

Because the factor depends on age and rate, so does the down payment. In the worked example below it runs from 71% of the price for a 62-year-old to 44% for a 90-year-old at the same rate, and it moves again whenever expected rates move. Treat any percentage you see quoted, including the ones on this page, as a starting point for a conversation with an FHA-approved lender, not a number to budget against.

Worked Example: Buying at Different Ages

To make that concrete, here is what the calculator on this page returns for the same $400,000 purchase at four ages. The inputs are stated so you can reproduce every row: a 6.5% expected rate (an example, not a quote), HUD's principal limit factor for that age at the 6.5% row, $8,000 of upfront mortgage insurance (2% of $400,000), the $6,000 federal maximum origination fee, and $3,000 of other closing costs — $17,000 in costs in all. "Cash to bring" is the price plus those costs, minus the principal limit.

Take the 70-year-old row: a buyer that age purchasing a $400,000 home would bring $260,200 to closing, and the reverse mortgage would cover the other $156,800. That $156,800 is the loan — the down payment isn't, and doesn't accrue interest. With no further draws and the rate unchanged, the calculator's table shows it compounding at 7% a year (6.5% plus 0.5% mortgage insurance) to $222,284 after 5 years and $315,115 after 10, when the buyer is 80. If the home's value stayed flat, the balance would pass the $400,000 value between years 10 and 15. Enter your own home-value growth assumption to see a different picture; HECMs are non-recourse, so the amount owed can never be collected from anything but the home.

HECM for Purchase vs. Converting Equity You Already Have

Both paths end at the same place — a HECM balance with no required monthly payment that grows over time — but they start from different questions:

• Use H4P whenyou're moving anyway. Downsizing, relocating closer to family, or buying a single-story home that's easier to age in place in are all reasons to combine the move and the reverse mortgage into one closing, rather than buying with cash or a conventional loan and refinancing later.
• Convert equity in your current home whenyou like where you live and don't want to move at all — a standard HECM lets you access cash, a line of credit, or monthly payments against the home you're already in. Our reverse mortgage calculator models that version directly.
• Sell and downsize with a conventional mortgage whenyou'd rather keep a smaller monthly payment than tie up roughly half the new home's price, or more, in cash — our standard mortgage amortization calculator models how a conventional loan would pay down instead.

There's no universally "better" option — it depends on whether you're moving at all, how much cash you have available for a down payment versus how much you want to preserve, and how comfortable you are with a monthly payment obligation on a fixed income.

Who Qualifies for HECM for Purchase

Eligibility mirrors a standard HECM with a few purchase-specific additions. Per the Consumer Financial Protection Bureau, "there is a 'Home Equity Conversion Mortgage (HECM) for Purchase' loan that allows people 62 and older to purchase a new principal residence with HECM loan proceeds," but you'll need cash on hand to cover the difference between the HECM proceeds and the sales price plus closing costs. The new home must become your primary residence, and — as the CFPB notes — "not all properties are eligible for the HECM for Purchase loan program; for example, cooperative units and some manufactured homes are ineligible." You must also stay current on property taxes, homeowners insurance, and upkeep for the life of the loan, and you can't be delinquent on federal debt. For the full set of general HECM eligibility rules that also apply here, see our reverse mortgage calculator page.

Methodology and Sources

The calculator above runs on the same HUD rules as our standard reverse mortgage calculator, with the purchase price treated as the obligation the loan must cover. The principal limit factor comes from HUD's published table for the youngest borrower's age and the expected rate, rounded down to the table's nearest 1/8-point row so the estimate never overstates it. The maximum claim amount is the lesser of the price and the 2026 FHA limit of $1,249,125 published on HUD's HECM program page; upfront mortgage insurance is 2% of that amount and the ongoing premium 0.5% a year; the origination fee defaults to the federal cap. The calculator does not model a lender's set-aside for property taxes and insurance or a change in rates after closing, so a lender's figure can differ. Eligibility details and the purchase-specific mechanics cited above come from the CFPB's guidance on using a reverse mortgage to buy a home. Every figure in the worked example was produced by the calculator from the inputs stated there — always confirm exact figures with an FHA-approved HECM for Purchase lender before budgeting against them. If you'd rather explore financing the new home with a conventional loan instead, our refinance amortization calculator and standard amortization methodology page cover that math.