An increase to the Home Equity Conversion Mortgage limit was signed by President Barack Obama in Denver today as part of the $787 billion American Recovery and Reinvestment Act.
The provision raises the Federal Housing Administration’s insured reverse mortgage loan limit to not exceed 150% of the Freddie Mac limit, or $625,500, according to sources. The increase would be effective only for calendar year 2009. The HECM lending limit was previously $417,000.
The increase was added back into the stimulus bill during the conference period. It originally passed through the House of Representatives on Jan. 28 but was not included in the Senate version of the bill, which was voted on Feb. 10. The provision, Sec. 1204 of the conference report, was approved by both congressional houses on Friday.
The Department of Housing and Urban Development is expected to issue a mortgagee letter before the increase goes into effect. “Assuming there are no problems that need to be ironed out, it should be only a matter of days or weeks,” said HUD spokesman Lemar Wooley in an email today.
The loan limit increase was requested by the National Reverse Mortgage Lenders Association and AARP, and supported by Rep. Barney Frank (D-Mass.), who chairs the House Financial Services Committee.
