Some consumers were asking about the increase in the HECM loan limit. However as you can see from this release by NRMLA (National Reverse Mortgage Lenders Association) that the HECM increase was not included in the recent Act.
FHA announced on March 6, 2008 a temporary increase in loan limits for all forward mortgages as a result of the Economic Stimulus Act of 2008. This guidance is outlined in Mortgagee Letter 2008-06 “Temporary Loan Limit Increase for FHA”. We want to remind all members that HECMs were not included in the Economic Stimulus Act. FHA’s loan limits for HECMs will retain the existing “floor” of 48% of the conforming loan limit or $200,160 as well as the “ceiling” of 87% or $362,790. Those areas in between are limited to 95 percent of the local median home value and will not change as a result of this action.

At one point we thought there could be some regional HECM loan limit increases as a result of the Department’s recalculation using Standard Metropolitan Statistical Areas (SMSA) in lieu of county by county home values. However, more recently, the Department came to the conclusion that HECMs are not included the Stimulus Act and therefore all guidance and loan limit increases as outlined in the Mortgagee Letter do not include HECMs.

In the meantime, we continue to work with key stakeholders and Congressional staff on the FHA Modernization Bill which will increase the loan limit for HECMS to a single national limit ($417,000).

Source: NRMLA 

If you have HECM or Reverse Mortgage questions, please call toll-free 1-888-973-8377. 

This entry was posted on Monday, March 10th, 2008 at 9:42 am and is filed under Reverse Mortgage News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.