The update is outlined in Mortgagee Letter 2025-22 and will be added to a future update of the Single Family Housing Policy Handbook 4000.1.

2025 vs. 2026 HECM Lending Limits

Age	New 2026 Limits ($1,249,125)	2025 Limits ($1,209,750)	Increase ($)
62	$432,197	$418,573	$13,624
65	$459,678	$445,188	$14,490
70	$495,902	$480,270	$15,632
75	$540,871	$523,821	$17,050
80	$603,327	$584,309	$19,018
85	$684,520	$662,943	$21,577
(Table is based on home values of $1,249,125 or higher and assumes a 6.375% Expected Rate)

Why the HECM Lending Limit Matters

The lending limit serves as the ceiling for how much of a home’s value can be used when calculating reverse mortgage proceeds. Even if a property appraises for more, HUD will only consider the national limit.

Example:
A home valued at $1.4 million in 2026 will still be capped at $1,249,125 for HECM calculations.

From this capped amount, HUD applies a percentage based on:

• Your age

• Current expected interest rates

• Whether the loan is fixed or adjustable

In general, older borrowers and lower interest rates equal higher proceeds.

HECM Lending Limit Growth Over Time

The HECM limit has steadily increased over the past decade—especially as home prices climbed nationwide. Before 2008, limits varied by county, but HUD moved to a single national limit to simplify the program.

YEAR	NATIONAL HECM LENDING LIMIT	LIMIT INCREASE ($)	LIMIT INCREASE (%)
2026	$1,249,125	$39,375	3.25%
2025	$1,209,750	$59,925	5.21%
2024	$1,149,825	$60,525	5.56%
2023	$1,089,300	$118,500	12.21%
2022	$970,800	$148,425	18.05%
2021	$822,375	$56,775	7.42%
2020	$765,600	$39,075	5.38%
2019	$726,525	$46,875	6.90%
2018	$679,650	$43,500	6.84%
2017	$636,150	$10,650	1.7%
2009 - 2016	$625,500	$208,500	50%
2006 - 2008	$417,000	* National Lending Limit of $417,000 was Implemented in 2006, which replaced regional loan limits.

These increases have opened the door for many homeowners, especially those with higher-value properties to access more of their home equity.

HECM vs. Jumbo Reverse Mortgages in 2026

With the new limit above $1.24M, the HECM program now serves many high-value homes. Still, jumbo (proprietary) reverse mortgages can be a better fit for properties worth $1.3 million or more because they aren’t capped by FHA guidelines.

When a Jumbo Reverse May Make More Sense:

• Your home value exceeds the HECM limit

• You want higher proceeds than FHA allows

• You prefer fewer restrictions on payouts or property types

Below is a comparison for a 75-year-old borrower using a standard 2.25% margin HECM and a competitive jumbo option:

HOME VALUE	2026 HECM	2026 JUMBO	NET JUMBO BENEFIT ($)
$1,249,125	$540,871	$634,142	$93,271
$1,350,000	$540,871	$685,800	$144,929
1,500,000	$540,871	$762,000	$221,129
2,000,000	$540,871	$1,016,000	$475,129
2,500,000	$540,871	$1,270,000	$729,129
3,000,000	$540,871	$1,524,000	$983,129
3,500,000	$540,871	$1,778,000	$1,237,129
$4,000,000	$540,871	$2,032,000	$1,491,129

Note: Proceeds vary depending on rates, program updates, and individual qualifications. Always request a written estimate.

What This Means for Homeowners in 2026

Despite fluctuating interest rates in recent years, reverse mortgages continue to be a powerful planning tool for retirement. The higher 2026 limit extends access to more homeowners—especially those in states with higher property values.

Reverse mortgages can help older adults:

• Eliminate monthly mortgage payments

• Create supplemental retirement income

• Build a financial cushion for emergencies

• Support aging in place

• Enhance long-term retirement planning

With more than a million households already using the program, 2026 looks like another year where reverse mortgages will play a meaningful role for retirees seeking stability and flexibility.

Source

2026 HECM limit details were announced in Mortgagee Letter 2025-22 and will be incorporated into an upcoming revision of FHA Handbook 4000.1.

Frequently Asked Questions About the 2026 HECM Reverse Mortgage Limits

Q. Who sets the HECM lending limit, and how is the 2026 limit calculated?

The HECM lending limit is set each year by the U.S. Department of Housing and Urban Development (HUD). HUD bases the limit on 150% of the national conforming loan limit published by Freddie Mac.
For 2026, the conforming limit is $832,750, so HUD multiplies that number by 1.5, resulting in the new HECM limit of $1,249,125.

Q. What is the maximum reverse mortgage lending limit for 2026?

The national HECM lending limit for 2026 is $1,249,125.
This number does not represent the maximum you can borrow—only the maximum home value HUD will consider when calculating how much you qualify for. Even if your home is worth more, the calculation is capped at this limit.

Q. What determines the maximum amount I can get from a HECM reverse mortgage?

Your available proceeds are determined by three primary factors:

1. Age of the youngest borrower or eligible non-borrowing spouse

2. Your home’s value or the national lending limit (whichever is less)

3. Prevailing interest rates at the time of application

The older you are and the lower rates are, the higher your principal limit tends to be.

Q. Is refinancing my reverse mortgage in 2026 worth considering?

It could be worthwhile if the new 2026 limit allows you to receive additional proceeds compared to your existing loan.
HUD requires a refinance to pass the 5x benefit test, meaning the financial benefit of the new loan must be at least five times the cost of refinancing. If you qualify for more money and meet this requirement, a refinance may be beneficial.

Q. Does the higher 2026 HECM limit mean every homeowner will get more money?

Not necessarily. The increased limit mainly benefits homeowners whose property values exceed the prior year’s limit.
If your home value is below the lending limit, your proceeds are determined by age and interest rates—not the cap itself.

Q. What happens if my home is worth more than $1,249,125?

If your home appraises for more than the 2026 HECM limit, HUD will still cap the value at $1,249,125 for loan calculations.
However, homeowners with higher-value properties may benefit from jumbo reverse mortgages, which are not subject to FHA limits.

Q. Do interest rates affect how much I can get on a reverse mortgage?

Yes. Reverse mortgage proceeds are highly sensitive to expected interest rates.
Lower expected rates typically increase the amount of money available. When rates rise, available proceeds tend to decrease. This is true even with higher lending limits.

Q. What is the minimum age for a HECM reverse mortgage in 2026?

The minimum age remains 62 for at least one borrower on the loan.
Non-borrowing spouses may be younger, and as long as they meet HUD’s eligibility rules, they are protected under the program.

Q. Can the 2026 loan limit change again mid-year?

No. Once HUD publishes the annual limit—effective January 1—it remains in place for the entire calendar year.
Changes only occur when HUD issues a new Mortgagee Letter announcing the next year’s limit.

Q. How does the 2026 limit compare to jumbo reverse mortgage options?

With a HECM limit of $1,249,125, the FHA program now accommodates many higher-value homes. However:

• Jumbo reverse mortgages may offer higher proceeds

• They often allow larger loan amounts for properties above the HECM cap

• Terms vary by lender, so comparing both options is important

Q. Will the higher 2026 limit increase my chances of qualifying?

The raising of the limit does not affect qualification requirements like age, occupancy, credit history, or property type.
However, it may allow more available equity to be accessed if your home’s value was previously limited by the lower 2025 cap.

Q. How do I know if the 2026 limit benefits me personally?

The only way to know is by running a personalized estimate based on:

• Your age

• Your property value

• Your existing mortgage balance (if applicable)

• Current interest rates

• Your goals (lump sum, line of credit, payment elimination, etc.)

A reverse mortgage professional can run a no-obligation quote showing how the 2026 increase affects your specific situation.

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The good news is there are steps you can take to protect yourself and keep your loan in good standing. Let’s break it down.

First Things First: Call Your Loan Servicer

Your loan servicer is the company that manages your reverse mortgage. If a disaster affects your home, call them ASAP—even if you’re not sure what you need.

Here’s why:
They can pause deadlines for your annual occupancy certification.
They’ll tell you what to do if your home is damaged or unlivable.
They can explain next steps for insurance claims or repairs.

If you’re not sure who your servicer is, check your latest mortgage statement or call the U.S. Department of Housing and Urban Development (HUD) at (800) 569-4287.

Know Your Responsibilities

Even after a disaster, your reverse mortgage obligations don’t disappear. You still have to:

• Live in the home as your primary residence (or notify your servicer if you’re displaced).
• Pay property taxes and homeowners insurance.
• Maintain the home (once it’s safe to do so).

If your home is damaged or temporarily unlivable, your servicer can help guide you through your options.

Disaster Relief Resources to Tap Into

If you need financial help or guidance, there are organizations that specialize in disaster relief for homeowners:

FEMA (Federal Emergency Management Agency): Offers grants for temporary housing, repairs, and other emergency needs. Visit www.disasterassistance.gov or call (800) 621-3362.

HUD Housing Counselors: Provides free advice on post-disaster mortgage options. Find a counselor at www.hud.gov/counseling or call (800) 569-4287.

SBA Disaster Loans: Yes, the Small Business Administration (SBA) helps homeowners too! They offer low-interest loans to repair or replace disaster-damaged homes. Check out www.sba.gov/disaster.

Handling Insurance Claims the Right Way

If you have homeowners insurance, file a claim as soon as possible. Your insurance company may send a check that’s made out to both you and your loan servicer.

That means:

• Your servicer holds the funds in an escrow account and releases money as repairs are completed.
• You’ll need to submit repair estimates and receipts to get the funds released.
• Keep detailed records of all your communications with the insurance company, contractors, and your servicer.

If your insurance doesn’t cover everything, check with FEMA or the SBA to see what additional help you can get.

Watch Out for Scams

Sadly, after every disaster, scammers come out of the woodwork. Stay alert and avoid:
Contractors asking for full payment upfront.
Fake FEMA or HUD reps calling for personal info.
Companies promising “easy” loan modifications or disaster relief.

When in doubt, verify everything with your servicer, FEMA, or HUD before handing over money or personal details.

Final Thoughts

Natural disasters are stressful enough without worrying about your reverse mortgage. But if you stay in contact with your servicer, take care of insurance claims, and tap into disaster relief resources, you’ll be in a much stronger position to recover.

For more details, check out the full guide from the CFPB:
Reverse Mortgage Borrowers Impacted by Natural Disasters

And if you have questions about how your reverse mortgage fits into your long-term financial picture, reach out to our team at ZYNG Mortgage. We’re happy to help.

A natural disaster can feel like the end—but it’s not. There is always hope. One of our clients, Lelia (video below), lost her home in the Paradise fire in California. Instead of rebuilding, she used her insurance funds to find a new home and start fresh. Recovery looks different for everyone, but with the right resources and guidance, a new beginning is always possible.

The post What Reverse Mortgage Borrowers Need to Know After a Natural Disaster appeared first on MLS Reverse Mortgage powered by Zyng Mortgage.

Myth 1: The Bank Owns Your Home
Myth 2: Reverse Mortgages Are Only for the Desperate
Myth 3: You Can Be Forced Out of  Your Home
Myth 4: Reverse Mortgages Are Too Expensive
Myth 5: Reverse Mortgages Will Drain All Your Equity
Myth 6: Reverse Mortgages Leave Nothing for Heirs
More Myths That Need Busting:
Myth: You Can’t Use a Reverse Mortgage to Buy a Home 
Myth: Both Spouses Have to Be 62
Myth: You Might Outlive a Reverse Mortgage
Myth: Reverse Mortgages Are Never Worth the Costs
Myth: Fixed-Rate Reverse Mortgages Are Always Best
Myth: You Can’t Sell and Move If You Have a Reverse Mortgage

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For many seniors, a reverse mortgage can be a lifeline to financial stability in retirement. Despite its growing popularity, many people still have questions about what a reverse mortgage is, how it works, and whether it might be the right option for them. In this comprehensive guide, we’ll delve into the mechanics, benefits, and considerations of reverse mortgages, equipping you with the knowledge you need to make an informed decision.

What Is a Reverse Mortgage?

A reverse mortgage is a loan designed specifically for homeowners aged 55 and older (age requirements vary by product) that allows them to convert a portion of their home equity into cash. Unlike a traditional mortgage, where the homeowner makes monthly payments to the lender, a reverse mortgage pays the homeowner. This arrangement provides a source of income during retirement, with no monthly payments required as long as the homeowner meets the loan’s conditions.

How Does a Reverse Mortgage Work?

1. Loan Disbursement: Homeowners can choose how to receive the loan proceeds, whether as a lump sum, monthly payments, a line of credit, or a combination of these options.
2. Eligibility: To qualify, the homeowner must:
   • Be at least 62 years old for a Home Equity Conversion Mortgage (HECM) or 55 years old for proprietary reverse mortgage products (learn more about proprietary products here).
   • Own the home outright or have significant equity.
   • Occupy the home as their primary residence.
   • Maintain the property and pay property taxes and homeowners insurance.
3. Repayment: The loan does not need to be repaid until the homeowner sells the home, moves out permanently, or passes away. At that point, the loan balance, including interest and fees, is paid from the sale proceeds of the home.
4. Non-Recourse Clause: Reverse mortgages are typically non-recourse loans, meaning the homeowner or their heirs will never owe more than the home’s value at the time of repayment.

Types of Reverse Mortgages

1. Home Equity Conversion Mortgage (HECM):
   • The most common type of reverse mortgage in the United States.
   • Insured by the Federal Housing Administration (FHA).
   • Available to homeowners aged 62 and older.
   • Offers flexible disbursement options.
2. Proprietary Reverse Mortgages:
   • Private loans offered by financial institutions.
   • Available to homeowners aged 55 and older.
   • May allow access to higher loan amounts for homes with significant value.
3. Single-Purpose Reverse Mortgages:
   • Offered by some state and local government agencies or nonprofit organizations.
   • Can only be used for a specific purpose, such as home repairs or property taxes.

Benefits of a Reverse Mortgage

1. Supplement Retirement Income: Reverse mortgages can provide a steady income stream to cover living expenses, medical bills, or other costs.
2. No Monthly Payments: Unlike traditional loans, reverse mortgages don’t require monthly payments, freeing up cash flow.
3. Flexible Options: Borrowers can choose how they want to receive their funds, tailoring the loan to their financial needs.
4. Retain Homeownership: The homeowner retains the title to the property as long as they meet the loan’s conditions.
5. Tax-Free Proceeds: Loan proceeds are generally not considered taxable income.

Considerations and Risks

While reverse mortgages offer many advantages, they are not without potential downsides. It’s important to consider:

1. Costs and Fees: Reverse mortgages often come with higher upfront costs compared to traditional loans. These include origination fees, closing costs, and mortgage insurance premiums.
2. Impact on Inheritance: The loan balance will reduce the equity left for heirs, which may affect inheritance planning.
3. Ongoing Responsibilities: Borrowers must maintain the home and stay current on property taxes and insurance to avoid default.
4. Interest Accumulation: The loan balance grows over time as interest accrues, reducing the remaining equity.
5. Potential Scams: Seniors should be cautious of predatory practices targeting reverse mortgage borrowers. Always verify reviews and that the company is property licensed.

Who Should Consider a Reverse Mortgage?

A reverse mortgage may be a good fit for homeowners who:

• Have significant home equity.
• Plan to stay in their home long-term.
• Need additional income to supplement retirement savings.
• Are comfortable with reducing the equity in their home.

Conversely, those who wish to leave their home’s full value to their heirs or have alternative financial resources may want to explore other options.

How to Apply for a Reverse Mortgage

1. Research and Compare: Investigate different lenders and reverse mortgage products to find the best fit.
2. Mandatory Counseling: Borrowers must participate in HUD-approved counseling to ensure they understand the loan’s terms and implications.
3. Loan Application: Complete the application process with the chosen lender, providing all required documentation.
4. Appraisal and Approval: The property’s value will be appraised to determine the loan amount, and the application will go through underwriting.
5. Closing: Once approved, the loan is finalized, and funds are disbursed according to the borrower’s preferences.

Alternatives to Reverse Mortgages

Before committing to a reverse mortgage, consider these alternatives:

• Home Equity Loans: Traditional loans with regular monthly payments.
• HELOCs: Home equity lines of credit with flexible borrowing and repayment terms.
• Downsizing: Selling the home and purchasing a smaller, more affordable property.
• Renting: Renting out part of the home to generate income.

Suggested Content

If you found this guide helpful, you may also enjoy these articles:

1. Pros and Cons of a Reverse Mortgage
2. Reverse Mortgage vs. Home Equity Loan: Which Is Better?
3. Death, Reverse Mortgages and Heirs
4. Top 5 Myths About Reverse Mortgages

Reverse mortgages can be a powerful financial tool for the right homeowner. By understanding how they work, their benefits, and their potential pitfalls, you can make an informed decision that supports your long-term financial goals. If you have any questions or want to explore whether a reverse mortgage is right for you, contact a trusted financial advisor or lender today.

The post Reverse Mortgages: A 2025 Comprehensive Guide appeared first on MLS Reverse Mortgage powered by Zyng Mortgage.

The Federal Housing Administration (FHA) has announced an increase in the maximum lending limit for Home Equity Conversion Mortgages (HECMs) for the 2025 calendar year. The new cap is set at $1,209,750, up from $1,149,825 in 2024. This adjustment will apply to case numbers assigned on or after January 1, 2025.

Further information can be found in Mortgagee Letter 2024-22, and these changes will be incorporated into an upcoming update of the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1).

2024 vs 2025 Reverse Mortgage Limit Comparison

Understanding the Implications of the Lending Limit

The lending limit sets the maximum property valuation considered for loan calculations, even if the home’s actual appraised value is higher. For instance, a home valued at $1,300,000 in 2025 would have its lending value capped at $1,209,750. This limit is vital in determining the proceeds available through a HECM.

To calculate a HECM loan, the FHA uses the lesser of the home’s value or the lending limit, multiplied by a HUD-determined percentage. This percentage depends on the borrower’s age and current interest rates. Generally, older borrowers qualify for more substantial proceeds, and lower interest rates further increase the loan amount.

Evolution of HECM Lending Caps:

HUD lending limits have historically mirrored housing market trends. A pivotal change occurred in 2008, transitioning from regional caps to a single national limit of $417,000. A year later, the Housing and Economic Recovery Act raised the limit to $625,500, a figure that remained unchanged for eight years.

In 2017, the limit increased modestly to $636,150, reflecting steady housing market growth. Since then, the cap has climbed consistently:

• 2018: $679,650 (+$43,500)
• 2019: $726,525 (+$46,875)
• 2020: $756,600 (+$39,075)

During the COVID-19 pandemic, the cap continued to rise:

• 2021: $822,375 (+$56,775)
• 2022: $970,800 (+$148,425)
• 2023: $1,089,300 (+$118,500)
• 2024: $1,149,825 (+$60,525)

For 2025, the new limit of $1,209,750 represents an additional increase of $59,925.

These steady increases highlight the strength of the housing market and expand opportunities for homeowners exploring reverse mortgages.

Additional Reading: History of the reverse mortgage program from 1961 through present

Comparing 2025 HECM and Jumbo Reverse Mortgages

When considering reverse mortgage options, it’s essential to evaluate all available programs. Jumbo reverse mortgages, or proprietary reverse mortgages, often benefit properties with higher values.

With the HECM limit now exceeding $1.2 million, jumbo mortgages may be advantageous for homes valued at $1,250,000 or more.

While several factors influence the choice between HECM and jumbo products, properties exceeding $1,209,750 in value remain subject to the HECM cap for calculations. Below is a comparative analysis of HECM and jumbo loan proceeds.

(Table based on borrower age 75. HECM Rate used in illustration: 2.25% CMT Margin. Expected rate at time of calculation on 12/3/2024: 6.50%. Jumbo reverse chosen for comparison is HomeSafe. Note that proceeds change week to week to it’s best to obtain a written estimate from one of our licensed reverse mortgage advisors.)

Real Estate and Mortgage Trends in 2024 and 2025

The real estate and mortgage markets have experienced notable shifts. The spike in interest rates in 2022 and 2023 reduced reverse mortgage proceeds. At the same time, softening home prices added new challenges. However, homeowners with properties valued over $1 million have benefited from rising lending limits, which allow for increased proceeds.

As we transition into 2025, reverse mortgages remain a valuable tool, helping over a million homeowners age in place. This financial solution continues to offer stability and flexibility, making it a worthwhile consideration with guidance from a seasoned reverse mortgage professional.

Source: 

2025 HECM limit details were published in Mortgagee Letter 2023-22 and will be included in a future Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) release.

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The Federal Housing Administration has recently declared an increase in the highest lending limit for Home Equity Conversion Mortgages for the 2024 calendar year. The new limit is set at $1,149,825, up from the previous $1,089,300. This change will be effective for case numbers assigned from January 1, 2024, onwards.

Further information can be found in Mortgagee Letter 2023-22, and these changes will be incorporated into an upcoming update of the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1).

2023 vs 2024 Reverse Mortgage Limit Comparison

Understanding the Implications of the Lending Limit

The lending limit represents the maximum valuation we assign to your property for loan purposes, regardless of whether its actual appraisal value is higher. Take, for instance, a home with an appraisal value of $1,250,000 in 2024; for lending purposes, its value would be capped at $1,149,825. This cap is crucial in calculating the amount of funds available to borrowers.

To determine the proceeds of a HECM loan, we apply a specific formula. We start by taking the lower of the home’s value or the lending limit. This figure is then multiplied by a percentage that HUD has established, which varies depending on your age and the prevailing interest rates. Generally, the formula is designed so that the older you are, the higher the potential loan proceeds you can qualify for. Similarly, more funds are typically accessible when interest rates are lower.

Evolution of HECM Lending Caps:

The trajectory of HUD lending limits has historically mirrored the fluctuations in home values. The landscape of these limits underwent a pivotal shift in 2008, transitioning from region-specific caps to a unified national ceiling of $417,000. This change marked a departure from the previous approach that was based on regional housing values. The following year, in 2009, under the impetus of the Housing and Economic Recovery Act, the limit experienced a substantial hike, setting the new bar at $625,500.

This figure remained constant for eight years until 2017, when it witnessed a modest increase of $10,650, bringing it to $636,150. Although not a dramatic rise, it was reflective of the gradual upswing in housing prices. The momentum of increases maintained its pace thereafter. In 2018, the HUD HECM cap ascended to $679,650, marking an upsurge of $43,500. The year 2019 saw the limit climb further to $726,525, an increment of $46,875, opening new refinancing possibilities for reverse mortgage borrowers. The upward trend continued into 2020, with the cap reaching $756,600, a rise of $39,075.

The Covid pandemic era did not halt this upward trajectory. In 2021, the HECM cap expanded to $822,375, an increase of $56,775, despite the global economic uncertainties. Remarkably, 2022 defied expectations with a significant spike in housing prices, propelling the HUD limit to an impressive $970,800, a leap of $148,425 in a single year!

This pattern of growth persisted into 2023, with the HECM lending limit attaining a new high of $1,089,300, a clear indicator of the sustained surge in housing market values. Looking ahead, the limit is poised for another substantial increment in 2024, reaching $1,149,825. These consistent escalations not only reflect a buoyant housing market but also broaden the spectrum of opportunities for individuals exploring reverse mortgages.

Additional Reading: History of the reverse mortgage program from 1961 through present

Comparing 2024 HECM and Jumbo Reverse Mortgages

In choosing the most suitable reverse mortgage program for a borrower, it’s essential to weigh the options between all available programs. Jumbo reverse mortgages, also known as proprietary reverse mortgages, are typically more advantageous for properties with higher market values. With the lending limit now exceeding $1 million, the appeal of a jumbo reverse mortgage becomes more prominent when the home value surpasses $1,250,000, given the current market conditions. While there are various factors to consider when opting for a jumbo mortgage, as a general rule, homes valued above $1,250,000 are prime candidates for this option. Below is a comparative analysis of the HECM lending limits against those of jumbo loans. It’s important to note that for all properties valued above $1,149,825, the HECM limit remains constant.

(Table based on borrower age 75. HECM Rate used in illustration: 2.00% CMT Margin. Expected rate at time of calculation on 12/5/2023: 6.32%. Jumbo reverse chosen for comparison is HomeSafe. Note that proceeds change week to week to it’s best to obtain a written estimate from one of our licensed reverse mortgage advisors.)

2023: A Year of Change in Real Estate and Mortgages

The real estate and mortgage landscape in 2023 continues to evolve from the previous year and will continue to evolve into 2024. In 2022 and 2023, we witnessed a significant spike in rates, which led to a decrease in the proceeds available from reverse mortgage loans compared to earlier amounts. Additionally, there has been a noticeable softening in the real estate market. However, for homeowners with properties valued over a million dollars, the updated reverse mortgage lending limits introduced a silver lining by offering additional proceeds.

As we progress through 2023 and into 2024, there’s much to appreciate. Reverse mortgages have been a pivotal aid for over a million homeowners, enabling them to comfortably age in place. This financial tool has proven to be a practical solution for many and is certainly worth considering, especially with guidance from a seasoned reverse mortgage professional.

Source: 

2024 HECM limit details were published in Mortgagee Letter 2023-22 and will be included in a future Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) release.

The post 2024 HECM Reverse Mortgage Loan Limits appeared first on MLS Reverse Mortgage powered by Zyng Mortgage.

2022 vs 2023 Reverse Mortgage Limit Comparison

What Does the Lending Limit Really Mean?

The lending limit is the maximum value that we will give to your home, even if it appraises higher than the limit. For example, a home valued at $1,250,000 would have a lending limit of $1,089,300 in 2023. We use the lending limit to determine how much proceeds are available to borrowers.

The complete formula for determining HECM loan proceeds is we use the lesser of the home value or lending limit and multiply that by a factor previously determined by HUD, which is based on your age and the current interest rate. In general, the older you are, the more proceeds you qualify for. Additionally, the lower the interest rates, the more proceeds that can be accessed.

History of Reverse Mortgage Limits

In 2006, HUD established a national loan limit of $417,000. Prior to 2006, the limits would change from county to county with some counties having higher limits than others.

Additional Reading: History of the reverse mortgage program from 1961 through present

2023 HECM vs. Jumbo (Proprietary)

When determining which reverse mortgage program is the best fit for a borrower, it’s important to compare all programs. Jumbo reverse mortgages, also called proprietary reverse mortgages, generally work best for higher home values. Since the lending limit increased to over $1 million, based on the current market, we don’t see a large benefit of using a jumbo reverse unless the home value is over $1,250,000. There are multiple reasons to consider a jumbo, so it’s not 100% cut and dry, but in general, consider looking at a jumbo with homes valued above $1,250,000. The chart below offers a comparison on the HECM lending limits and the jumbo loan limits. Note that the HECM limit stays the same for all home values above $1,089,300.

(Table based on borrower age 75. HECM Rate used in illustration: 2.50% CMT Margin. Expected rate at time of calculation on 12/6/2022: 6.13%. Jumbo reverse chosen for comparison is HomeSafe. Note that proceeds change week to week to it’s best to obtain a written estimate from one of our licensed reverse mortgage advisors.)

Conclusions

2022 has been quite a year in real estate and mortgages. Rates spiked causing reverse mortgage loan proceeds to be reduced from prior amounts. The real estate market has started to soften. The bright note for those with homes over a million dollars is that the new reverse lending limits will help provide additional proceeds.

Going into 2023 there a lot to be grateful for. Reverse mortgages have helped over a million homeowners age in place. It’s viable solution for so many and worth exploring with a true reverse mortgage professional.

Source: 

2023 HECM limit details were published in Mortgagee Letter 2022-21 and will be included in a future Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) release.

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If you are currently in process on a HECM reverse mortgage or are looking to apply, please don’t hestiate to reach out to us toll free (1-888-888-4834) with any questions you may have about how a Government shutdown will impact you and your family.

The below chart shows the history of US Government Shutdowns with the length of time from 1976 through 2018.

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This positive increase represents 150 percent of the Freddie Mac national conforming limit of $453,100.

Comparison of Principal Limit

This is good news for higher home value homes, especially since October 2nd changes have caused a reduction in principal limits. As you can see in the chart above, a 72 year old homeowner with a $680,000 home would receive about $22,142 additional proceeds over the prior limits (assuming a rate of 4.25%).

Brief Look at the HECM Lending Limit History

Prior to 2006, the HECM lending limit or MCA varied from county to county. In 2006, a national lending limit of $417,000 was established. Later, in 2009, Congress increased the HECM loan limit to $625,500. Then in 2017, the lending limit was increased to $636,150. Now, starting 2018, the new limit will be $679,650.

If you have questions on how the new reverse mortgage limit affects you, please don’t hesitate to call us toll free at 1-888-888-4834 or Apply Online!

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