President Obama has signed the American Recovery and Reinvestment Act last week in Denver, Colorado.
Section 12004 of the Act raises the national loan limit for HECM’s to 150% of the Freddie Mac Loan limit, which would put the reverse mortgage lending limit to around $625,000. This higher limit will remain for the rest of the 2009 year only. For it to be extended it would require going back before congress for approval.
This act will increase the limit from $417,000 to $625,000, granting more flexibility for people with higher mortgage balances or for homes that have more equity than the $417,000 limit previously afforded.
HUD now must first issue a Mortgagee Letter to implement the new loan limit. There is as of today, no certain time table for this to occur.