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The Department of Housing and Urban Development announced the maximum claim amount of federally-backed reverse mortgages will be increased to $822,375 for 2021. This marks the fifth consecutive year that the lending limit has seen an increase.
"HUD calculates this figure at 150% of the conforming loan limits on mortgages to be acquired by Fannie Mae and Freddie Mac, which was announced by the Federal Housing Finance Agency (FHFA) last week to be $548,250 for the calendar year 2021—up from $510,400 in 2020," according to Reverse Mortgage Daily.
The increase marks the first time the lending limit has increased to over $800,000 for reverse mortgages. While reverse mortgage professionals will be happy about the increase, RMD reported that the Federal Housing Administration's commissioner, Dana Wade, criticized the increase for both forward and reverse mortgage programs.
"FHA has seen consistent increases in loan limits during the past few years, putting it in a position to serve a segment of borrowers that may be better-served by the conventional [non-agency] market," Wade said in an announcement of the new limits, according to the report. "FHA’s mission is to support low-to-moderate income borrowers, so why does the law permit FHA to insure mortgages up to $822,375? This is a question for Congress and the taxpayers who stand behind FHA to answer."
Click here to read the full report.