The U.S. Department of Housing and Urban Development published Mortgagee Letter 2009-07 which raises the national FHA loan limit for HECMs to $625,500. The changes are effective immediately for loans closed on or after February 24, 2009.
According to the ML, FHA will allow HECM loans that received case number assignments but did not close prior to the effective date of the mortgagee letter to be closed using either the old limit that was used to originally calculate the loan, or the new limits as described in the ML. An option will be made available in FHA Connection for the lender to choose which rate to use until April 30, 2009.
Loan limits for the special exception areas of Alaska, Hawaii, Guam and the Virgin Islands have a potential higher ceiling in 2009 of $1,094,625 (1-unit), $1,401,300 (2-unit) $1,693,875 (3-unit); and $2,105,100 (4-unit). At the present time, no counties in these areas qualify for limits above the national ceiling of $729,750.
Note, NRMLA emailed me that the paragraph above is incorrect. FHA clarified that the limit for Alaska, Hawaii, Guam and the Virgin Islands will not exceed $625,500.
To read a copy of ML 2009-07 click the link below.
Want to run a scenario with the new loan limits? Click here.