Credit unions that issue reverse mortgages in the Home Equity Conversion Mortgage program should find a more stable market this fall after the Department of Housing and Urban Development left the limit for the maximum mortgage amount in place at $625,500 in all areas of the U.S.
The amount had been expected to drop in certain higher-cost areas of the country as of Oct. 1. The Federal Housing Administration, which HUD oversees, had already announced that limit for the size of forward mortgages eligible for FHA insurance would drop on Oct. 1, effectively limiting them in more-expensive markets.
The loan limit for the HECM program was raised from $417,000 to $625,500 in February 2009 and was extended last year. It had been scheduled to drop again on Oct. 1.
Reverse mortgage providers in higher-cost parts of the country had warned that dropping the limits on amounts eligible for reverse mortgages would have a severely negative impact on their business.