12 Nov 08 HUD Raises Reverse Mortgage Loan Limit for Seniors
HUD approved a single national loan limit of $417,000 for federally insured Home Equity Conversion Mortgage (HECM) or reverse mortgage loans. The new, higher mortgage loan limit will allow borrowers to obtain a significantly higher loan amounts from their homes, if their home value is higher the previous HUD limit. Previously, the HECM program assigned different lending limits by county ranging from $200,160 in rural areas to $362,790 in the highest home value areas.
Similarly, existing borrowers whose home value is greater than the new HUD limit may be able to increase their benefit by refinancing their reverse mortgage and are encouraged to contact their lenders.
To identify a reputable lender, Consumer Reports, in its October 2008 Money issue, recommends that seniors contact The National Reverse Mortgage Lenders Association (NRMLA) members, who are required to sign a code of conduct and follow best practices for the treatment and counseling of seniors. NRMLA’s consumer site provides users with a searchable database of NRMLA lenders in their local area.
“HUD should be applauded for its expedient implementation of the single national loan limit for the HECM program, especially during such a tumultuous period,” said Peter Bell, president of NRMLA. “The higher single national loan limit and other provisions expected to be implemented in the coming months make reverse mortgages a more viable retirement financial option for a broader audience who can receive higher benefits at lower origination fees than ever before.”
A reverse mortgage is a unique loan that enables senior homeowners to convert part of the equity in their homes into tax-free income without having to sell the home, give up title, or take on a new monthly mortgage payment. Reverse mortgages are available to individuals 62 or older who own their home. Funds obtained from the reverse mortgage are tax-free. > Read complete article.
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