AARP to Congress: Lift Cap on the Number of FHA Reverse Mortgages

A congressional hearing devoted explicitly to questions and answers regarding the Federal Housing Administration’s reverse mortgage program today presented a look into current issues of Congressional concern, including the current cap on the number of reverse mortgages allowed under FHA insurance.

The issue has come to light in recent conversations among members of Congress and the reverse mortgage industry with today’s hearing providing the opportunity for some outside the industry to weigh in on the topic. 

AARP addressed the cap in written testimony presented by Lori Trawinski, Senior Strategic Policy Advisor for AARP’s Public Policy Institute.


“To guarantee continuity of the HECM program, AARP supports legislation that would remove the statutory limit on the number of loans that can be insured by HUD in a given year,” Trawinski said. “Loan limits were imposed when the HECM program was a pilot program. The loan number cap has been raised several times over the years and has, at times, led to a halt in originations when the cap was reached. Lifting the statutory loan limit would be helpful in encouraging lenders to offer reverse mortgages and remain committed to this market.”

Industry advocates, including the National Reverse Mortgage Lenders Association, have addressed the issue of late, however without any outcome expected immediately. 

And not everyone is in favor of removing the cap, or having the government involved in guaranteeing reverse mortgages in the first place.

“I am not against reverse mortgages as an equity extraction tool. But I do not see any reason for the Federal government to guarantee and subsidize it,” said Dr. Anthony Sanders, professor of Real Estate Finance at George Mason University during his testimony.

“At a minimum, the Federal government should get out of the reverse mortgage insurance and subsidization business, particularly since there is an easy alternative: seniors sell their home and buy a smaller dwelling or rent.”

Overall, the questions from members of Congress led to discussion among those ingrained in the industry as well as from affiliated businesses. 

“We were pleased to see the various stakeholders including senior advocacy groups, counseling organizations, the industry and HUD are all in sync that the program is valuable, it helps seniors, and steps have been made to improve the program’s performance,” Peter Bell, NRMLA president and CEO told RMD. 

Written by Elizabeth Ecker

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  • Even AARP talks about an annual cap which is nonsense.  The law has a lifetime program cap.  Congress forces NRMLA back annually to have the cap expanded (in the past) and now plead for suspension each year.  It is a ridiculous exercise and should be terminated by permanently removing the cap.

  • Please make sure Dr. Sanders does not receive a Reverse Mortgage when he needs one. Let him have to sell his home that he has loved for years and move into an apartment.

      • ladyforreverse,

        Try using this as a URL address:

        Apparently the email address is not automatically shown on the GMU website unless one is connected to the university.

  • I applaud ARP for there position  on removing the statutory limit on the number of loans that can be insured by HUD in
    a given year. The cap has been a senseless time consuming aggravation for the industry. It also has created an annual fear amongst lenders that should never take place.

    As far as the good Dr. Anthony Sanders, he needs some educating on why the reverse mortgage is marketable in the secondary market. I am frankly surprised he is a professor of Real Estate Finance at George Mason University?

    Good day,

    John A. Smaldone

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