HUD approves single national loan limit of $417,000 for reverse mortgage programMortgagePress.comHUD, reverse mortgages, NRMLA, Home Equity Conversion Mortgage, Peter Bell
The National Reverse Mortgage Lenders Association has announced
that the Department of Housing and Urban Development (HUD) approved
a single national loan limit of $417,000 for federally insured Home
Equity Conversion Mortgage (HECM) reverse mortgages.
The new, higher lending limit will enable borrowers to obtain a
substantially greater benefit 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 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 at www.reversemortgage.org
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."
HUD is aiming for an effective date of Nov. 1, however the exact
date will not be finalized until HUD issues a mortgagee letter on
the new loan limit.
For more information, visit www.hud.gov.
