A reverse mortgage is a tool designed to allow senior citizens to use the equity in their home to supplement their monthly income. The loan was designed to allow the owner to remain in their home while still creating income. But the program did not help if the senior wanted to move in order to down-size, live in a home that had no stairs, be closer to family, etc.
As of January 1, 2009, FHA is allowing their version of a reverse mortgage, called the Home Equity Conversion Mortgage (HECM), to be used to purchase a new home. Under this program, you may use a HECM to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing.
If you want free information about reverse mortgages call AARP toll free at (800) 209-8085.