|The most recent round of emergency economic legislation included an increase in maximum reverse mortgage amounts.
Under H.R. 1, the American Recovery and Reinvestment Act -- which was signed into law last week by President Barack Obama -- the limit on home-equity conversion mortgages was raised to 150 percent of Freddie Mac's conforming loan limit, a press release today from Golden Gateway Financial indicated.
While H.R. 1 raised the conforming limit in high-priced areas to $729,750 from the $625,500 limit that was effective on Jan. 1, the baseline conforming level for one-unit properties is $417,000.
Using the $417,000 limit, the maximum HECM will increase to $625,500, according to Golden Gateway -- which operates a Web site with resources for seniors.
Golden Gateway said states where the higher limit will be most helpful include California, Massachusetts, New York, Washington and South Carolina.
The reverse mortgage limit was raised to $417,000 in November from a previous range of between $200,160 and $362,790 depending on the county. That increase was the result of H.R. 3221, the Housing and the Economic Recovery Act of 2008, which became law on July 30.
A statement from National Reverse Mortgage Lenders Association spokesman Darryl Hicks said that his group plans to issue a press release on the new limit when the Department of Housing and Urban Development issues a mortgagee letter making the new loan limits effective. He expects HUD to issue the letter tomorrow.
Conforming Limit See Saws
After emergency economic legislation enacted under President George Bush last year temporarily pushed the conforming limit to $729,750, it fell back this year to $625,500 in high-priced areas. But emergency legislation under President Barack Obama has the limit higher again.