Last week, the the draft of the economic recovery bill released by the House of Representatives contains a provision that would set the single national loan limit for HECM at a higher level than $417,000–for the balance of 2009. The change would bring the HECM loan limit to 150% of the Freddie Mac limit, or $625,500. If the Freddie Mac limit changes, the HECM limit would change as a by product. This change would allow seniors that have a reverse mortgage with larger home values to refinance and receive more money from these products as well as offer those individual who have not obtained a reverse mortgage to be eligible to receive more money than the current limits allow.
SEC. 12004. FHA REVERSE MORTGAGE LOAN LIMITS FOR2009.
For mortgages for which the mortgagee issues credit approval for the borrower during calendar year 2009, the second sentence of section 255(g) of the National Housing Act (12 U.S.C. 171520(g)) shall be considered to require that in no case may the benefits of insurance under such section 255 exceed 150 percent of the maximum dollar amount in effect under the sixth sentence of section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)).
This change is being offered as a temporary measure, thru 2009 only, because it is part of an emergency economic stimulus package. A permanent change would have to be enacted through a specific bill at a later date.