HECM Lending Limit Increase: Here’s Who Benefits the Most

HECM growth in 2022 may hinge on one word

Last Tuesday the Federal Housing Administration announced they have raised the national lending limit for FHA-insured mortgages up to $970,800 for FHA loans assigned case numbers in the calendar year 2022. Which homeowners will benefit the most? We’ll examine that in a moment but first how the national loan limits are arrived at in the first place.

The answer is two-fold.

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Dan Hultquist December 6, 2021 at 6:39 am

Great summary of the HECM limit increase. I would add there may be other beneficiaries – ALL future HECM borrowers.

Consider a 70-year old homeowner with a $1.5mm home value that now sees the value of a HECM in 2022. That homeowner will pay $19,416 into the Mutual Mortgage insurance Fund 15 days after closing. That loan presents little risk to the fund. The PLF may be 50% or more, but the maximum LTV at origination would be 33% because the home’s value exceeds the HECM limit. I see this MCA Limit increase as a big win for FHA as well as the borrower.

Shannon Hicks December 6, 2021 at 8:13 am

Thank you Dan! Excellent points!


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