Reverse Mortgage Glossary

Loan limit, lending limit

The FHA loan limit (also called lending limit) is effectively the maximum appraised value FHA will allow to determine HECM proceeds.

The loan limit only matters when the home value exceeds the lending limit (which is common in high cost markets like the Bay Area or Northeast). If the home value is less than the lending limit, the maximum claim amount equals the appraised value.

If the appraised value exceeds the lending limit, then the maximum claim amount equals the lending limit.

For example, if the appraised value is $150,000, the principal limit will be calculated based on a maximum claim amount of $150,000. If the appraised value is $1,800,000 (which is well over the lending limit), then the principal limit will be calculated based on a maximum claim amount equal to the lending limit.

The lending limit effectively puts a cap on how much a homeowner can receive from the HECM even if they have a very expensive home.

FHA loan limits

FHA periodically adjusts the loan limit to reflect conditions in the housing market. For case numbers assigned on or after:

  • January 1, 2019: $726,525
  • January 1, 2017: $636,150
  • January 1, 2011: $625,500

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