Loan Limit for FHA Reverses in Dispute

The housing bill signed by President Bush raises the loan limit in Federal Housing Administration reverse mortgages to at least $417,000 nationwide, but it could be much higher under some interpretations. Peter Bell, president of the National Reverse Mortgage Lenders Association, said he is "getting conflicting feedback" about the section of the bill that raises the loan limits for FHA-insured reverse mortgages, which are formally known as Home Equity Conversion Mortgages. Some believe the loan limit for HECMs could be $625,500 nationwide. Others say the loan limits above $417,000 should be determined by multiplying the median home price by 115%, up to a maximum of $625,000. It looks like the Department of Housing and Urban Development will have to make the final call. "In the end, it will be whatever HUD's attorneys, in consultation with Capitol Hill, decide it is," Mr. Bell said. NRMLA can be found online at http://www.reversemortgage.org.