Reverse Mortgage Lending Limit Extended for 2013

reverse mortgage calculatorHud announced it will leave the Reverse Mortgage lending limit at $625,500 through 2013. In 2009 FHA-HUD raised the limit from the National conforming amount of $417,000 to $625,500 because most “Jumbo” reverse mortgages disappeared from the market-place due to the financial crisis.

Although the majority of seniors are not impacted by the extension of the higher lending limit, it does help folks that own homes in high cost areas, like California, New York, Massachusetts, Hawaii, and Washington D.C.

Seniors who own homes with values in excess of $417,000 are able to access a much higher percentage of their equity when the limit is $625,500 versus $417,000.

While the country is still struggling to get our housing market back on track and grow home equity, it is essential that FHA-HUD continue to back-stop the HECM program by filling in the gap left by the private lenders’ exit from the senior mortgage market.

Until private lenders re-enter the market by offering “Proprietary Jumbo” loans again, it is likely that FHA will see fit to continue extending the HECM lending limit each year.

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