New Reverse Mortgage Loan Limit: $625,500

The economic stimulus bill signed into law yesterday (2/17/09) by President Obama will raise the single national loan limit for HECMs (Home Equity Conversion Mortgage) to 150% of the Freddie Mac loan limit. That would create a HECM limit of $625,500. Currently, this limit is only applicable for loans made during the balance of 2009.It’s unknown when this new change will take effect. We first must wait for HUD to issue a Mortgagee Letter acknowleding the increase.

This will have a major impact for senior homeowners with higher value homes. Since jumbo reverse mortgages are nearly non-existent right now, seniors with higher value homes have been limited to the lending limit of $417,000 and before that $362,790. The additional $200,000 +/- increase will mean a large increase in the net benefit available to seniors in higher value homes.

For more information: Reverse Mortgage Lenders