At this time, the clock is ticking on reducing the Lending Limits on the federally insured Reverse loan program that is for senors age 62 or older. Currently the limit is set at $625,250 but it has been less in the past. The most recent amount was at $417,000 but due to the difficulties in the real estate sector and home values continuing to fall, the possibility of reducing the Lending Limit back to $417,000 is looming within the next several weeks.
At a time when seniors need more assistance than ever due to budget cutbacks on government sponsored programs and the potential for cutbacks on Medicare and Social Security, using funds from a Reverse loan are the only remaining option for financial relief. Hopefully, the current amount will remain in place and not reduced, eliminating the opportunity for a borrower to receive as much money as they can from a Reverse mortgage for their medical and cost of living expenses.
There is a pending bill, H.R. 2508 that has been introduced as of Friday, July 15th., requesting that the current Lending Limits remain in place for FHA loans but it’s not known if it will be passed or not. This would also include the “Forward” site of the loan program that has made home ownership possible for millions of Americans and it would keep that Lending Limit at the current amount of $729,750.
All we can do is wait for the House Committee on Financial services to review this important issue and there should be a hearing on it prior to October when the reduction would be taking place.
Let’s hope that that make the best decision for seniors, First Time home-buyers, the housing market and not wound it any further, just when everyone else is struggling in these difficult times and needs the resources to buy a home or stay in the one they currently own.