How Much Can You Borrow with a Reverse Mortgage for Purchase?

A Reverse Mortgage for Purchase is a financial product that allows homeowners aged 62 or older to buy a new primary residence using a reverse mortgage loan. Unlike traditional mortgages, this option does not require monthly mortgage payments. Instead, the loan is repaid when the borrower sells the home, moves out permanently, or passes away.

The reverse mortgage for Purchase program was designed to help retirees downsize or relocate to a more suitable home without the financial stress of monthly payments. It combines the benefits of a home purchase with the advantages of a reverse mortgage.

How Does a Reverse Mortgage for Purchase Work?

The borrower provides a significant down payment, typically between 40% to 60% of the home’s purchase price. The reverse mortgage covers the rest. This loan is backed by the Federal Housing Administration (FHA) and is often referred to as a Home Equity Conversion Mortgage for Purchase (HECM for Purchase).

Instead of taking out a traditional mortgage and paying it off over time, the reverse mortgage allows the homeowner to live in the property without making monthly payments. Interest and fees accumulate over time and are paid back when the home is sold or the homeowner no longer lives there.

What Factors Affect How Much You Can Borrow?

When exploring how much you can borrow with a Reverse Mortgage for Purchase, several factors come into play:

1. Age of the Youngest Borrower

The older you are, the more you can borrow. Lenders consider the age of the youngest borrower or eligible non-borrowing spouse. Typically, someone aged 70 will be able to borrow more than someone aged 62.

2. Home Value

The appraised value of the home you intend to purchase plays a significant role. The higher the value, the more you may be eligible to borrow.

3. Interest Rates

Interest rates impact loan amounts. Lower interest rates usually allow for higher borrowing limits, while higher rates reduce what you can borrow.

4. Type of Reverse Mortgage

Standard reverse mortgages and jumbo reverse mortgages have different lending limits. Jumbo loans allow for borrowing beyond the FHA’s loan limits, often for luxury properties or homes in high-value markets.

5. FHA Lending Limits

For 2025, the FHA lending limit for a HECM reverse mortgage is $1,149,825. If the home you’re buying exceeds this amount, you’ll need to consider a jumbo reverse mortgage, which doesn’t have the same federal restrictions.

How Can a Jumbo Reverse Mortgage Calculator Help?

A Jumbo Reverse Mortgage Calculator is an essential tool for estimating your borrowing potential. Unlike standard calculators, it is specifically designed for high-value homes that fall outside FHA limits.

Here’s what a Jumbo Reverse Mortgage Calculator considers:

• Age of the borrower
• Estimated home value
• Down payment amount
• Location of the home
• Current interest rates
• Type of property (condo, single-family home, etc.)

Using the calculator helps you determine your loan amount before engaging a lender. It also gives you a clearer picture of how much down payment you'll need and how much equity will remain in the property.

What is the Required Down Payment?

With a Reverse Mortgage for Purchase, borrowers must bring a down payment that usually ranges from 40% to 60% of the purchase price. The exact amount depends on your age, interest rates, and property value.

For example, if you want to purchase a $600,000 home and the reverse mortgage covers $350,000, you’ll need to provide $250,000 as a down payment. The higher your age and the lower the interest rate, the smaller the down payment you’ll need.

If the home price exceeds the FHA limit, a jumbo reverse mortgage is your best bet. These loans accommodate high-value properties and allow more flexibility in down payment and borrowing amounts.

Who Qualifies for a Reverse Mortgage for Purchase?

To qualify for a Reverse Mortgage for Purchase, borrowers must meet these criteria:

• Be at least 62 years old
• Plan to live in the home as their primary residence
• Have sufficient funds for the down payment
• Be able to pay ongoing property taxes, homeowners insurance, and maintenance costs
• Attend a HUD-approved counseling session

There are no income or credit score requirements, which makes this a more accessible option for many retirees.

What are the Advantages of a Reverse Mortgage for Purchase?

1. No Monthly Mortgage Payments – This eases financial stress in retirement.
2. Relocate or Downsize – Move closer to family or to a more manageable home.
3. Maintain Cash Flow – Use retirement savings for other priorities.
4. Stay in the Home for Life – As long as you meet loan obligations, you can remain in your home.
5. Non-Recourse Loan – You or your heirs will never owe more than the home’s value when the loan is due.

What are the Limitations?

While beneficial, a Reverse Mortgage for Purchase does come with considerations:

• You must cover property taxes, homeowners insurance, and maintenance costs.
• The loan balance increases over time due to accrued interest.
• Heirs may need to sell the home to repay the loan upon your death.
• You may receive less equity than you would with a traditional mortgage.

Is a Jumbo Reverse Mortgage Right for You?

If you're considering a high-value home or downsizing from a luxury property, a jumbo reverse mortgage might be your best solution. Since these loans aren’t capped by FHA limits, you can borrow more and retain more flexibility.

Using a jumbo reverse mortgage Calculator will help you:

• Understand your borrowing potential
• Plan your down payment
• Forecast your equity in the new home
• Compare loan scenarios based on home value and age

Final Thoughts: How Much Can You Really Borrow?

The answer to “How much can you borrow with a Reverse Mortgage for Purchase?” depends on multiple personal and market factors. With tools like a Jumbo Reverse Mortgage Calculator, you can better understand your options and make a confident decision about your next home purchase.

By combining the power of a reverse mortgage with the freedom to relocate or downsize, retirees can enjoy their golden years without financial strain. Whether you're exploring your first reverse mortgage or considering a jumbo option, speaking with a licensed reverse mortgage specialist is the next best step.