The Department of Housing and Urban Development released Mortgagee Letter 2009-07 which raises the national FHA loan limit for reverse mortgages (HECMs) to $625,500. The changes are effective immediately for loans closed on or after February 24, 2009. The speed at which this mortgagee letter was released is shockingly fast but most likely in response to concerns that this increase runs out at the end of 2009 in its current version. What does this mean for reverse mortgages? More people with higher home values (e.g. over $400,000) will either look to refinance their current reverse mortgage or those who have opted out because they felt that the costs may not have been worth the amount of money that they qualify for with the reverse mortgage may reconsider based upon the additional funds available to them with the higher loan amounts.
For the mortgagee letter, click here.