For the fourth straight year, the Department of Housing and Urban Development has raised the lending limit for federally backed reverse mortgages. In 2020, the cap will be $765,600, up from $726,525 in 2019.
According to a mortgagee letter HUD sent, for the period January 1, 2020 through December 31, 2020, the maximum claim amount for FHA-insured HECMs will be $765,600 (150 percent of Federal Home Loan Mortgage Corporation’s (Freddie Mac) national conforming limit of $510,400). This maximum claim amount of $765,500 is also applicable to Freddie Mac’s special exception areas: Alaska, Hawaii, Guam, and the Virgin Islands.
Reverse Mortgage Daily reported this rise marks a positive development for the reverse mortgage business, while also sending a message that widely-discussed regional lending limits will not be coming with the beginning of the new year, according to Reverse Market Insight president John Lunde.
“It’s a decent increase for 2020 which is a positive development for additional volume,” said Lunde. “More importantly, they’re keeping the single national lending limit after there was public hinting about potentially reverting to county lending limits at some point. While the 2020 announcement doesn’t say that won’t ever happen, at least it’s not happening January 1, 2020.”
Click on the image above to learn more about the limit increase.