Picture this: You’re sitting across from Margaret, a 70-year-old client who just sold her family home for $450,000. She wants to downsize to a $350,000 condo, and she’s interested in a HECM for Purchase to eliminate monthly mortgage payments. She asks you a simple question: “Should I just put down the minimum required, or does it make sense to put more down?” Fortunately, you know a HECM for Purchase secret to help your client.

Most REALTORS, if they know anything about reverse mortgages at all, would simply explain the minimum down payment requirement and move on. But what if you could show Margaret how putting more money down could create a growing financial reserve that she can access tax-free whenever she needs it? This strategy can transform how your senior clients view their home purchase, and it positions you as a trusted advisor who truly understands their unique financial needs.

Let me show you why this matters for your business. When you help senior clients make smarter financial decisions, you don’t just earn one transaction. You earn their loyalty, referrals from their adult children, and a reputation as the go-to REALTOR for the 62+ market.

Quick HECM for Purchase Basics

Before we dive into the strategy, let’s cover the fundamentals. A HECM for Purchase allows buyers age 62 and older to purchase a home without taking on monthly mortgage payments. Instead of a traditional mortgage, they use a reverse mortgage that doesn’t require repayment until they move out, sell the home, or pass away.

The down payment requirement typically ranges from about 45% to 65% of the purchase price. The exact percentage depends primarily on the borrower’s age. A 62-year-old might need to put down around 65%, while an 80-year-old might only need about 45%. The older the borrower, the less they need to put down because their life expectancy is shorter.

To qualify, borrowers must be at least 62 years old and purchase the home as their primary residence. They need to meet standard FHA credit and property requirements, but the underwriting is often more flexible than traditional mortgages since there are no monthly mortgage payments to qualify for.

Most REALTORS stop here. They mention to their clients the typical minimum down payment requirements, then they complete the purchase, and move on to the next deal. But there’s a powerful strategy that most REALTORS never learn about.

The Power of the Line of Credit Structure

Here’s where things get interesting. When your client puts down MORE than the minimum required down payment, something remarkable happens. That extra money from this HECM for Purchase secret doesn’t just disappear into equity. It becomes available as a Line of Credit that your client can access whenever they need it.

Let’s use Margaret as an example. She’s buying a $350,000 condo. At age 75, she might be required to put down approximately $175,000 (50% of the purchase price). But Margaret has $450,000 from her home sale. What if she put down $225,000 instead of just $175,000?

That extra $50,000 becomes available to her as a Line of Credit. She doesn’t have to use it right away. In fact, the strategy works best when she doesn’t use it immediately. But she knows it’s there, guaranteed and accessible whenever she needs it.

Unlike a Home Equity Line of Credit (HELOC) from a bank, this Line of Credit cannot be frozen or canceled. Banks can reduce or eliminate HELOCs when home values drop or if they decide to change their lending policies. But a HECM Line of Credit is backed by FHA insurance and remains available as long as Margaret meets her basic obligations (paying property taxes, homeowners insurance, and maintaining the home in livable condition).

This is guaranteed access to funds. No bank can take it away. No market downturn can eliminate it. It’s a financial resource that Margaret controls completely.

Your Client’s Growing Equity Is a Great HECM for Purchase Secret

Now here’s the game-changer that most REALTORS never learn about. The unused portion of the Line of Credit grows every single month. This isn’t a maybe or a sometimes. It’s guaranteed growth, written into the loan agreement.

The growth rate equals the current interest rate on the loan plus 0.50% (to compensate for the mortgage insurance premium). If the current rate is 6.5%, the unused Line of Credit grows at 7.0% annually. This growth compounds monthly, which means it accelerates over time. If the interest rate goes down, the Line of Credit growth is still accelerating.

Let’s see what this means for Margaret’s $50,000 Line of Credit at a 7% growth rate. In the first month, her Line of Credit grows by approximately $291. Not earth-shattering, but it’s just the beginning. After one year, she has about $53,600 available. After five years, she has approximately $70,100 available. After ten years, she has nearly $98,400 available.

Think about that. This HECM for Purchase secret means Margaret puts an extra $50,000 down on her home. Ten years later, she has $98,400 available to access. She didn’t invest in stocks. She didn’t take market risk. She simply put more money down on her home purchase, and that money has been growing, guaranteed, every single month.

This growth happens whether home values go up or down. It happens in good economies and bad. It happens whether the stock market soars or crashes. The growth is built into the loan structure and backed by FHA insurance.

And here’s the best part for your clients: When Margaret withdraws money from her Line of Credit, not a single penny of it is taxable income. She’s accessing her own equity, so the IRS doesn’t consider it income. This is tax-free access to a growing asset.

HECM for Purchase Secret Scenarios Where This Makes Sense

Understanding the mechanics is one thing, but when should you actually suggest this strategy to your clients? Let me walk you through four common scenarios where putting more down makes perfect sense.

The Conservative Planner: You have a client like Robert, age 68, who sold his home for $500,000 and wants to buy a $400,000 home. Robert is conservative with money. He likes having cash reserves for emergencies, but he hates seeing money sit in a savings account earning 0.5% interest. By putting an extra $75,000 down and creating a growing Line of Credit, Robert gets the security of accessible reserves plus growth that outpaces savings accounts. He sleeps better knowing the money is there, and he feels smart knowing it’s growing every month.

The Healthcare Buffer: Consider Susan, age 72, who knows that healthcare costs tend to increase with age. She’s healthy now, but she wants a financial cushion for potential future medical expenses or long-term care needs. By putting an extra $60,000 down on her HECM purchase, she creates a growing healthcare reserve. In ten years, when she might need it most, that $60,000 could have grown to over $118,000. She’s essentially pre-funded her future healthcare needs while the money grows tax-free.

The Legacy Builder: Meet James and Patricia, ages 75 and 73. They have $800,000 in investment accounts they want to leave to their children. They’re buying a $350,000 home and could easily pay cash, but that would reduce their investment portfolio. Instead, they put down $225,000 on a HECM purchase and keep $575,000 invested. The extra $50,000 they put down (beyond the minimum) creates a growing Line of Credit for emergencies. Their investment accounts continue growing for their heirs, and they maintain liquidity through the Line of Credit.

The Market Timer: This is for clients like David, age 69, who has significant money in stocks and retirement accounts. Markets go up and down, and David hates being forced to sell investments during a downturn. By creating a growing Line of Credit through a strategic HECM purchase down payment, David has a buffer fund. When markets drop, he can tap his Line of Credit instead of selling stocks at a loss. When markets recover, he can replenish the Line of Credit if he chooses. This strategy gives him flexibility to avoid forced liquidations at the worst possible times.

How to Present HECM for Purchase Secret to Your Clients

You don’t need to be a financial expert to share this strategy with your senior clients. You just need to ask the right questions and explain the concept clearly.

Start with questions like these: “After your down payment, will you have cash sitting in savings accounts earning minimal interest?” or “Are you concerned about having accessible reserves for unexpected expenses?” or “Would you like your down payment to work harder for you while remaining accessible?”

When you explain the concept, keep it simple. Try language like this: “When you put more down than the minimum required, that extra amount becomes available to you as a Line of Credit. The unused portion grows every month at a guaranteed rate. You can access it tax-free whenever you need it, but if you don’t need it, it just keeps growing.”

You’ll hear objections. Some clients will say, “I don’t want to borrow money from my house.” Your response: “You’re not borrowing. You’re putting more of your own money in and keeping it accessible and growing. You’re creating a financial tool you control completely.”

Others might say, “I’d rather invest that money in the stock market.” Your response: “That’s a valid choice. This strategy isn’t for everyone. Some clients like having a portion of their funds in a guaranteed, accessible reserve that grows without market risk. It’s about balance and having options.”

This strategy isn’t appropriate for every client. If someone needs to keep their down payment to the minimum because they need cash for other immediate expenses, you don’t need to push this approach. If a client is philosophically opposed to any type of mortgage, respect that. Your job is to present options, not pressure clients into strategies that don’t fit their situation.

Your Role as the Trusted Advisor

Here’s why learning this strategy matters for your business. Most REALTORS who work with seniors simply process transactions. They help clients find homes, negotiate deals, and handle paperwork. That’s valuable, but it’s not memorable.

When you understand strategies like this, you become a trusted advisor. You’re not just selling homes. You’re helping seniors make smarter life decisions. You’re showing them options they never knew existed. You’re protecting their interests in ways other REALTORS can’t.

This knowledge builds trust with your senior clients, but it does something even more powerful. It builds trust with their adult children. When Margaret’s daughter sees that you helped her mother create a growing financial reserve through a smart down payment strategy, she remembers you. She tells her friends. She sends you referrals. She might even choose you when she’s ready to buy or sell.

The senior real estate market is growing rapidly as Baby Boomers age. REALTORS who specialize in serving this market, who understand the unique financial tools available to seniors, who can speak intelligently about strategies like this one, they’re the ones who will dominate this market for decades to come.

You don’t need to become a reverse mortgage expert. And you’re not a licensed financial advisor. You just need to know enough to identify opportunities and connect your clients with qualified HECM specialists who can handle the technical details. Your role is to ask the right questions, present the possibilities, and protect your clients’ interests.

Ready to Master Senior HECM for Purchase Secrets?

The strategy we’ve covered today is just one tool in your toolkit for serving senior clients better. When you help a client like Margaret understand how putting more down creates a growing, tax-free financial reserve, you’re not just completing a transaction. You’re changing how she thinks about her home purchase and her financial future.

Every senior client deserves a REALTOR who understands these strategies. Every REALTOR who works with seniors deserves the knowledge to serve their clients at this level. The question is simple: Are you ready to become the REALTOR whom seniors trust with their most important housing decisions?

Download our checklist “Is a HECM for Purchase Right for Me?” to help your seniors clients go through a step-by-step process of deciding if, when, and how to proceed.

Start building your reputation now as the go-to REALTOR for smart senior home buyers in your market.