What is a HECM?
A Home Equity Conversion Mortgage (HECM) is an FHA-insured loan designed for homeowners aged 62 and older. It allows retirees to access a portion of their home equity while eliminating mandatory monthly mortgage payments, helping them secure long-term financial stability.
A HECM loan is based on three key factors:
✅ The Age of the Youngest Borrower – The older you are, the more equity you may access.
✅ Appraised Value of the Home – A third-party FHA appraiser determines the fair market value.
✅ Current Interest Rates – FHA guidelines help determine the loan amount.
There are no required monthly mortgage payments—instead, the loan balance is repaid when the borrower sells, moves, or passes away. Any remaining equity belongs to the borrower's heirs.
🔹 Eliminate Mortgage Payments – Free up cash flow while staying in your home.
🔹 Supplement Retirement Income – Cover healthcare costs, property taxes, and daily living expenses.
🔹 Buy a New Home – Use a HECM for Purchase (H4P) to buy a home with no monthly mortgage payments.
🔹 Establish a Line of Credit – A flexible, growing credit line that can be used when needed.
Many retirees today are carrying mortgage debt into retirement, making it harder to manage expenses like healthcare, property taxes, and daily living costs. With rising home values and increasing costs of living, a HECM provides flexibility by turning home equity into a financial resource while ensuring you can remain in your home.