Updates on New Reverse Mortgage Loan Limit

It’s official, the reverse mortgage loan limits are now at $625,500 for the remainder of 2009.  I’ve received a bunch of questions about it, so here is a quick summary of readers questions:

Q.  Will Alaska, Hawaii, Guam and the Virgin Islands operate under a single HECM loan limit of 625,500?

A. Yes.

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Q. When can we start closing HECMs with the new loan limit?

A.  Wholesalers are waiting on confirmation from Fannie Mae, but at this time the earliest they would be ready is March 4th.

Q. Does the higher loan limit apply to HECM for Purchase?

A. Yes.

Q. Is there any change to the fee structure for HECMs?

A. No, HUD will continue to collect a 2% MIP upfront and .5% annually and the maximum origination fee will remain at $6K.

Q. Is there a calculator that I can use to run a scenario with the new loan limits?

A. Yes, IBIS provided a calculator for RMD readers.  See here.

Hope this helps, have a great weekend!

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