Lenders are gearing up to sell a type of reverse mortgage typically used by seniors looking to downsize their homes, as Texas, a key market, opens to the niche-within-a-niche product.

This version of the government-insured Home Equity Conversion Mortgage, known as the HECM for purchase, gives seniors flexibility in buying a home. The "loan" allows a borrower to tap the equity in an existing home to buy a new one, frequently because the borrower has an empty nest and needs less space. This setup means a senior can pay for the purchase before selling the old home and without taking on more debt payments.

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