Can a borrower using the HECM purchase program have more than one FHA-insured loan?

Current Home Equity Conversion Mortgage (HECM) mortgagors that plan to sell their existing residence and use the HECM for purchase program to obtain a new principal residence must pay off the existing FHA-insured mortgage before the HECM for Purchase mortgage can be insured.

For additional information see Mortgagee Letter 2009-11 available at https://www.hud.gov/program_offices/administration/hudclips/letters/mortgagee
 

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-02351