It’s been several years since the Federal Housing Administration has raised the loan limit for reverse mortgages, but in 2017 the industry will finally see an increase. Currently the HECM loan limit is $625,500 and this will rise to $636,150. This new limit will apply only to case numbers issued on or after January 1, 2017.
This increase is accompanied by an increase in the national conforming loan limit which will expand to $424,100. The national conforming loan limit hasn’t seen a boost in over a decade and is expected to result in higher mortgage volume.
In addition, the FHA will increase its national loan limit “floor” to $275,665 in 2017 from $271,050 and its loan limit “ceiling” in high-cost areas would rise to $636,150 from $625,500. The floor is determined at 65% of the national conforming loan limit, while the ceiling figure is 150% of the national conforming loan limit.
According to National Mortgage News:
FHA determines its loan limits for forward mortgages based on median home prices. Limits are set by metropolitan statistical area and county. FHA said that maximum loan limits for forward mortgages increased in 2,948 counties and remained the same in 286 counties. The loan limits did not decrease in any part of the country, according to the announcement.
Reverse mortgage is an individualized, specialized loan for those 62 and older that allows seniors to tap into the equity of their home while living mortgage and loan payment free. The funds can be accessed via a lump sum, line of credit, monthly installments, or even to purchase a home.
Jan Jordan is a Reverse Mortgage Specialist serving the Fort Collins, Loveland, Greeley, Longmont, Boulder and other Front Range areas of Colorado. Click here to contact Jan and learn if reverse mortgage is right for you.