President Obama’s recent economic stimulus bill will give older Americans access to greater equity in their homes. The bill will raise the Home Equity Conversion Mortgage loan limits to 150 percent of the Freddie Mac loan limit, creating a HECM loan limit of $625,500. The higher limit is only applicable for loans made during the balance of 2009.
“The past six months have been very important ones for the reverse mortgage industry and seniors in particular,” said Bart Johnson, a reverse mortgage pioneer and current co-chair of the National Reverse Mortgage Lenders Association, in a press statement. “During that time, the federal government has raised lending limits twice and reduced and capped origination fees.”
According to Golden Gateway Financial, seniors in five states have a self-reported average home value between the most recent HECM loan limit of $417,000 and the new limit of $625,500. Those states include California, Massachusetts, New York, Washington and South Carolina.