Last month the U.S. Department of Housing and Urban Development (HUD) increased the lending limits for federally backed reverse mortgages and this is very good news for seniors.
The new Lending Limit for FHA HECM loans went into effect this month ( January) and the amount is now $726,525 an increase from the previous limit of $679,650 and it could make a difference for seniors who were unable to receive enough funds from a reverse loan to pay off an existing mortgage prior to this increase from HUD.
California has some of the highest property values in the country and on the average many homes exceeded the old HUD Lending Limit and homeowners need to have access to the equity that fell through a “donut hole”. But now they have the possibility of receiving more money then previously and it’s worth the time to find out.
The reverse loan amount is calculated by the youngest borrower’s age and the HUD Lending Limit for the value of the subject property and other factors, but the main determination is the value of the property and with the increased Lending Limit, it just might make a difference for seniors to qualify successfully for a reverse loan.
For senors who previously looked into using the loan but it wouldn’t benefit them, I would say, now is the time to revisit it and see if the recent changes will make a difference for you, plus there are so many other new options and loan programs to chose from, but you need to do your research.