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HUD issues HECM for purchase program guidanceMortgagePress.comHUD, HECM, Mortgagee Letter 2008-33, Housing and Economic Recovery Act On Oct. 20, the U.S. Department of Housing and Urban Development (HUD) issued Mortgagee Letter 2008-33 (ML 08-33) to address the Home Equity Conversion Mortgage (HECM) for Purchase Program. The Housing and Economic Recovery Act (HERA) allows HECM mortgagors to purchase a new principal residence with HECM loan proceeds. Section 2122(a)(9) of HERA amends section 255 of the National Housing Act to authorize HUD to insure HECMs used for the purchase of a 1-4 family dwelling unit. Accordingly, eligible mortgagors now have the opportunity to purchase a principal residence with HECM loan proceeds. HUD requires lenders to ensure that: • The property, when used as collateral for the HECM, will serve as the principal residence of the HECM mortgagor; • Construction is complete and a certificate of occupancy or its equivalent has been issued • Any construction loan financing for the property is satisfied; and • The HECM liens will be in a first and second lien position and, at the time of closing, there are no other liens against the property. For a copy of ML 08-33, click here.