Dear Realtor:

This is a very smooth process, but there are a couple federal mandates you must adhere to.

Following are the few do’s and don’t’s for realtors on a HECM for Purchase:


IF your client is purchasing a condo, DO be sure the condo is FHA approved.

Click here for the FHA Approved Condo List

DO scour the contract to make sure there are NO seller concessions, credits, allowances, or incentives. This is a federal mandate and there is no way around it. Call me if you would like guidance on this matter.

DO put me in touch with the builder if your client is looking at new construction. I must have an Occupancy Permit before I can take an application.


DON’T forget to check the FHA condo approval site if your client is purchasing a condo. If the condo is not FHA approved, Southern Trust Mortgage will work to get it approved; however, this takes about 6 weeks, and there is never a guarantee it will be approved by FHA.

DON’T write a 21-day contract. 30 days is the minimum.

DON’T plan to close on the exit home and the purchase home the same day if your client is planning to use proceeds from the sale as purchase monies – per the Patriot Act we must source the funds.

Call at any time with questions. I look forward to working with you!


Laurie MacNaughton [506562] is a freelance writer and Reverse Mortgage Consultant with Atlantic Coast Mortgage.

She can be reached at 703-477-1183 Direct or