Karen’s husband was an awesome handyman around the house. He could fix anything, and it was not uncommon to see him working on home repair projects or wearing a tool belt. However, since he passed away, managing the house alone had become challenging for Karen. While their home had served them well and was perfect for raising their family, its four levels and 50-year-old construction had become too much for her to handle.

Karen’s biggest desire was to buy one of those low-maintenance patio homes like her friend did. These new homes had all the luxurious features she wanted, such as a security system, new appliances, plenty of light, and just enough space on the back deck to sit and enjoy the sun rise and sun set.

But there was a problem: The house she planned to sell needed some repairs and wasn’t in the best condition. She would only make around $500,000 from selling it. The new home she wanted would cost $700,000. At first glance, it seemed like she’d have to either take $200,000 from her retirement savings or get a $200,000 mortgage. However, taking on mortgage payments at 75 didn’t seem wise.

This situation isn’t uncommon, and financial advisors often find themselves in Karen’s shoes.

Imagine you’re Karen’s financial advisor. You want her to have the easier lifestyle she deserves, especially now that she no longer has her husband’s pension. However, advising her to take on a mortgage payment of $1,330 at her age doesn’t seem wise. Taking $200,000 from her $500,000 nest egg also isn’t a great idea. After running the numbers, you realize that leaving the $500,000 invested could provide the extra income she needs for the rest of her life.

You’ve done well as her financial advisor, ensuring she has the right insurance and some fixed-income sources and her Social Security. But if she withdraws $200,000 now, her portfolio’s success probability drops below 50%. Your financial planning software confirms this.

However, there’s an option many overlook: the HECM for Purchase, or H4P. This FHA-insured program could be perfect for Karen. It allows her to finance part of the purchase price without making monthly payments for life.

Here’s how it works: Karen sells her current home and nets $500,000. She uses $440,000 for the down payment on the new home and finances the rest of the $700,000 purchase using H4P. This leaves her with $60,000 leftover, providing her with a much-needed reserve fund.

The new buyers accept the home as-is, knowing they can fix it up and increase its value. It’s a win-win: the young couple gets an affordable home, and Karen can move on to a low-maintenance lifestyle.

The HECM works by calculating Karen’s down payment based on her age, the home’s value, and the current interest rate. She won’t need to make principal and interest payments if she lives there, maintains the property, and meets other loan terms.

If Karen lives there for 20 more years and then sells, she could have over $300,000 in equity. If property values fall and the HECM balance is higher than the home’s value, FHA steps in, ensuring neither Karenl nor her estate are responsible for the difference.

Next time a client faces a similar situation, consider HECM for Purchase. It could be the solution they need while helping you retain more assets under management and strengthening your client relationships.

George Bain is a Reverse Mortgage Planner with Fairway Independent Mortgage.