While the economy is showing some signs of improvement, it is clear that many seniors are continuing to struggle in the current economic environment. As such, the U.S. Department of Housing and Urban Development officially extended higher 2009 loan limits through 2010.
In the midst of the worst of the Financial Crisis, in early 2009, President Barack Obama signed a new bill, The American Recovery and Reinvestment Act of 2009 (ARRA) on February 17, 2009. This was the “stimulus bill” we heard so much about.
Under ARRA, the national Federal Housing Administration (FHA) loan limit for the Home Equity Conversion Mortgage (HECM) was increased from $417,000 to $625,500. The increased limit was intended to only last through 2009.
The increase has allowed many senior homeowners living in higher valued homes the ability to receive significantly more money from a FHA Reverse Mortgage than in the past.
Congress recognizes the many benefits of Reverse Mortgages and continues to improve the benefits and safeguards of the popular FHA insured program. Over the past few years, Congress increased the amount of money that seniors can receive from the program, reduced the fees, and expanded the program by allowing the proceeds to be used for home purchase. Co-ops have been approved by Congress but are awaiting HUD approval.
A Reverse Mortgage is a loan that enables homeowners aged 62 or older to borrow against the equity in their home without having to sell the home, give up title, or take on a monthly mortgage payment. The money can be used for any purpose. Homeowners should only consider a reverse mortgage if you plan to stay in your home at least a few years, as the upfront costs are considered high.
