Dr. Sylvia Williams: Reverse Mortgage News

It wasn't too long ago that the lending limit on the reverse mortgage (HECM) was increased to one national limit of $417,000 instead of lower limits that varied by county. The increase was part of HR3221, the FHA Modernization Act, passed in July, 2008. It wasn't until November, 2008, that HUD allowed implementation of the new limit. The increase allowed seniors (over 62) with home values above the old county lending limit to access more of their equity.

The limit has been raised again, this time to $625,500 which will allow access to even more equity on higher valued homes. (Note from Sylvia: "I find this ironic in a time when most homeowners' values have fallen). Since the Jumbo reverse mortgage is not available in these current market conditions, the higher limit HECM essentially steps in for the defunct jumbo, but at much better interest rates and with the FHA insurance.
The higher limit will be temporary and for the balance of 2009 only. Congress would have to act on it again before this year is out to extend it beyond '09.

To see if you qualify for a reverse mortgage using the new HECM lending limit,
please use my no obligation, free reverse mortgage analysis and quote form.