It's almost 2 years since this question was asked. Although the answer may be the same, with the changes in loan-to-value on the reverse mortgages, a 66 year old may not be able to access enough equity. What might be better would be to find out how much you can borrow against the new purchase, use the proceeds of your sale to put towards equity, and then take out a purchase reverse mortgage. If anyone thinks that they can take out a reverse mortgage, then keep the home as an investment property and live in the cheaper one, they can forget about it. Once you are not living in the home for a year, the reverse mortgage has to be paid back. There are lots of issues here, only one of which is the fact that the original poster did not explain very well what she has in mind.