How does FHA define a HECM for purchase loan?

FHA defines “HECM for Purchase” as a real estate purchase where:

- Title to the property is transferred to the HECM mortgagor;

- The mortgagor will occupy the property as a principal residence; and

- The HECM first and second lien will be the only liens against the property at the time of closing.

For additional information see Federal Register 24 CFR §206.45 at:  https://www.govinfo.gov/content/pkg/FR-2017-01-19/pdf/2017-01044.pdf


All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.


Topic Number: KA-01462