Reverse Mortgage Loan Blog

This excerpt from the Minneapolis Star Tribune titled New strings attached: A look at changes buyers will see in the mortgage market for 2009 does a decent job at summing up the new reverse mortgage rules and limits:

NEW REVERSE MORTGAGES

Late this year, the FHA-insured Home Equity Conversion Mortgage (HECM) program was changed to allow people older than 62 to use the equity in an existing house to get a reverse mortgage — a mortgage that pays you out of your home’s equity — that can be used to buy a different house. This enables you to avoid taking on a mortgage payment as part of the transaction. In other words, you can use the proceeds from the sale of your existing house and combine them with the funds from a reverse mortgage to buy another house.

In addition, effective Nov. 6, the Department of Housing and Urban Development (HUD) set its national loan limit for HECM reverse mortgages at $417,000 — same as the conventional loan limit — except in high-cost areas. To be eligible for the HECM purchase program, your house must be paid off or you must have a low loan balance that can be paid off with proceeds from the reverse mortgage. A reverse mortgage is available regardless of your income. The amount you can borrow depends on your age, the current interest rate and the value of your home or the FHA mortgage limits for your area.

Found here.

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