Lending Limits of HECM’s

Over 90% of the reverse mortgages have been the Home Equity Conversion Mortgages. Referred to as HECM’s, these reverse mortgages often provide the greatest cash benefit. HECM’s are based on the Appraised Value or the Lending Limit established by FHA (Federal Housing Authority). Up until June 18th, the lending limit for Clark County and many of the counties in Portland (Clackamas, Columbia, Multnomah, Yamhill, and Washington Counties) have been $284,600. This means that homes that were valued at, for example, $350,000, would only have a portion (81%) of their home recognized by HUD. This would reduce the amount of equity one could use in a reverse mortgage. The fortunate thing about the FHA Lending Limits is that they change regularly.

As of June 18, 2007, the lending limits for Clark County and many of the Portland counties(Clackamas, Columbia, Multnomah, Yamhill, and Washington Counties), is going up from $284,600 to $304,950 (1 family unit). This provides over $20,000 more in equity to access as income, line of credit, or lump sum non-taxable income.

Though it still does not provide full recognition of value for homes over the limit stated above, there are other programs that may provide greater benefits that have higher lending limits or no lending limits. Be sure to contact me with any questions (gag@seniorlifesolutions.net).

Other lending limit changes to take place June 18, 2007 (subject to change) are:

Chelan & Douglas Counties: From $213,750 to $232,250
Jefferson County: $319,200 to $332,500
Kittitas County: $205,500 to $232,250
Mason County: $204250 to $213,750
Tillamook County: $230,850 to $237,500

Explore posts in the same categories: Reverse Mortgage Details

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