Reverse Mortgage for Purchase Florida for Homeowners 55 and Older

How a Reverse Mortgage for Purchase Works in Florida

You bring a cash investment to closing, and the reverse mortgage pays the rest of the purchase price. The money you bring can come from your own savings, the sale of your current home or other assets, a gift, a personal unsecured loan, or a loan against other real estate you own, as long as the new loan's payment is counted in the financial assessment and the assessment still passes; it also covers the closing costs of the purchase. It may not come from a bridge loan, seller financing, a cash withdrawal from a credit card, a loan against a retirement account, a life insurance policy or a brokerage account, a down payment assistance program, or any other lending commitment. After closing there is no required monthly mortgage payment* on the reverse mortgage, and borrowers remain responsible for property taxes, homeowners insurance, HOA dues, and any special assessments. You keep paying property taxes, homeowners insurance and any association dues, keep the home in repair and live in it as your main home. Interest and fees are added to the loan balance, so the amount you owe grows over time. The rate is fixed or variable depending on the option you choose; on the line of credit the rate is variable, and a variable rate can change. You may qualify, subject to approval.

The eight steps below follow the lender's written guide.

1. Initial consultation. A licensed mortgage loan originator explains the program options, discusses eligibility, and gives you a list of reverse mortgage counseling agencies.
2. Independent reverse mortgage counseling. Every borrower completes independent reverse mortgage counseling. The lender does not accept a completed application until it has the counseling certificate signed by the counselor and the borrower.
3. Purchase contract. The contract is in the borrowers' names only, includes a home inspection contingency, and makes the seller responsible for completing and paying for repairs that affect the safety and soundness of the home. If the contract is dated before counseling, the home must be listed on the counseling certificate.
4. Completed application and documents. The file includes the signed purchase contract, the seller's property condition disclosure, the lead paint disclosure, and documents showing where your funds to close come from.
5. Appraisal. The loan is based on the appraised value; if the home appraises below the price, you sign a letter saying you want to go ahead at the contract price. When the principal limit is more than $1,000,000, the lender requires two appraisals by two independent appraisers.
6. Underwriting. Every loan is evaluated individually and is subject to property approval, borrower qualification and underwriting conditions.
7. Closing. You bring your cash investment and the closing costs, and the reverse mortgage pays the rest of the purchase price. The money you bring can come from your own savings, the sale of your current home or other assets, a gift, a personal unsecured loan, or a loan against other real estate you own, as long as the new loan's payment is counted in the financial assessment and the assessment still passes; it also covers the closing costs of the purchase. The seller and other interested parties may contribute up to 6% of the sales price toward your closing costs.
8. Move in. You move in within 60 days of closing, and the home is your primary residence, where you live at least 183 days of the year.

As a licensed Florida mortgage broker, we walk eligible Florida buyers through each step in plain language. We explain the math. We explain the document list. We explain what happens after closing. We do not provide investment, tax, or legal advice. Eligibility is subject to property and borrower approval.

An Illustrative Florida Purchase Scenario

Consider a hypothetical example. A 60-year-old Florida couple sells their current single family home and wants to buy into a Naples condo community closer to family. The community is not on the FHA approved list. No FHA or HUD condo community approval is required, subject to the product's own condo review. They have proceeds from the home sale and want to preserve their retirement savings rather than pay all cash for the new condo.

Under the proprietary reverse mortgage for purchase, the couple contributes a portion of their home sale proceeds at closing as the required borrower contribution. The reverse mortgage funds the balance of the purchase. They take title to the new condo, occupy it as their primary residence within 60 days of closing, and have no required monthly mortgage payment* on the reverse mortgage portion. They remain responsible for property taxes, homeowners insurance, HOA dues, and any special assessments. You keep paying property taxes, homeowners insurance and any association dues, keep the home in repair and live in it as your main home. Interest and fees are added to the loan balance, so the amount you owe grows over time. The rate is fixed or variable depending on the option you choose; on the line of credit the rate is variable, and a variable rate can change. You may qualify, subject to approval.

Every line of this scenario reflects program rules from the proprietary lending guide. None of it is a promise of approval. Every file is reviewed on its own facts. This example exists to show how the pieces fit together for a Florida purchase, not to predict an outcome. Eligibility is subject to property and borrower approval.

Reverse Mortgage for Purchase Florida, Frequently Asked Questions

Related Reading for Florida Purchase Buyers

These related pages go deeper on topics that often come up for Florida buyers age 55 and older considering a proprietary reverse mortgage for purchase.