HECM Program Running Again

The Federal Housing Administration reverse mortgage program is up and running again due to Senate passage of a continuing funding resolution that renews the agency's authority to insure more loans.The president signed the continuing resolution Feb. 15. The increasingly popular FHA Home Equity Conversion Mortgage program hit a statutory 275,000-loan cap Feb. 14, forcing the agency to stop approving HECM loans for two days. The CR includes a provision that suspends the HECM cap until Sept. 30, which is the end of the federal government's fiscal year. As part of FHA reform legislation, the Bush administration will be asking Congress to eliminate the statutory loan cap. Reverse mortgage lenders originated 76,276 HECMs in fiscal year 2006, up 77% from the level in fiscal 2005. Since Sept. 30, the FHA endorsed over 32,000 HECMs, which triggered the temporary shutdown.