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New Loan Limit… It’s here!


Under ARRA, the national FHA loan limit for HECM will increase from $417,000 to $625,500 (from 100 percent to 150 percent of the conforming limit).  HECM loan mortgagors do not undergo the same procedures for credit approval as do mortgagors for forward mortgages.  FHA does not deem the credit approval process to be complete until the HECM loan is closed.  Therefore, HECM loans closed on or after the date of this Mortgagee Letter are subject to the higher maximum dollar amounts. 


            In those areas, the maximum claim payable by FHA is 150 percent of the Freddie Mac conforming limits.  To avoid potential cases where a claim could be less than the national limit, as adjusted for the special exception areas, HUD had decided not to make the adjustment.  Therefore, these few special exception areas will have the same $625,500 limit as all other areas.


FHA will, for a limited time, allow HECM loans that received case number assignments but did not close prior to the effective date of this mortgagee letter to be closed using either the old limit that was used to originally calculate the loan, or the new limits as prescribed herein.  An option will be made available in FHA Connection for the lender to choose which rate to use.  This option will be available until April 30, 2009.


Editor in Chief:
As a prominent commentator and Editor in Chief at, Shannon Hicks has played a pivotal role in reshaping the conversation around reverse mortgages. His unique perspectives and deep understanding of the industry have not only educated countless readers but has also contributed to introducing practical strategies utilizing housing wealth with a reverse mortgage.
Shannon’s journey into the world of reverse mortgages began in 2002 as an originator and his prior work in the financial services industry. Shannon has been covering reverse mortgage news stories since 2008 when he launched the podcast HECMWorld Weekly. Later, in 2010 he began producing the weekly video series The Industry Leader Update and Friday’s Food for Thought.
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