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FHA-Increases-HECM-Lending-Limits-2025

Big News for 2025: FHA Increases HECM Lending Limit

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The Federal Housing Administration (FHA) has raised the national lending limit for the Home Equity Conversion Mortgage (HECM) Program to $1,209,750, up from $1,149,825 in 2024. This new limit, effective January 1, 2025, marks the ninth consecutive year of increases and the first time it has surpassed $1.2 million!

What Does This Mean for You?
This increase is great news for homeowners aged 62 and older! A higher lending limit means you could potentially access more cash from your home’s equity—especially if your home has a higher value.

Here’s an example of how this increase could translate to more proceeds for a 72- and 75-year-old couple with a $1.2 million home:

  • 2024 proceeds: $453,100
  • 2025 proceeds: $497,200
    (That’s an additional $24,600!)*

This increase could also make reverse mortgages a viable option for homeowners with significant mortgage balances who may not have qualified before.

Why Consider a Reverse Mortgage?
A HECM allows you to convert a portion of your home’s value into cash to use however you’d like. Better yet, no monthly mortgage payments are required—so long as you keep current with obligations like paying property taxes, homeowners insurance, and home maintenance). This could free up additional funds to be used for the things you need or have always dreamed of.

Imagine the possibilities of using a reverse mortgage to:

  • Consolidate existing debts
  • Fund home improvements for aging in place
  • Build a financial safety net for future expenses
  • Or simply enjoy your retirement with an additional source of cash flow

Is Now the Right Time?
With this new lending limit, now could be an ideal time to explore your options. Call the Longbridge Financial team today to learn more about how these changes could work for you. Our team is here to help you explore your options, so you can make an informed decision and enjoy greater financial freedom in 2025…and beyond!

* The estimates shown are based on a CA property and the HECM program as of 01/01/2025. Assumptions include a home value of $1,200,000 and a 72 year old borrower with a $450,000 mortgage. The initial interest rate is 5.500% (6.125% APR), tied to one month CMT with a margin of 1.585%. In this example, closing costs include an origination fee of $6000, third-party closing costs of $4,700 depending on purchase price or appraised value, and an up-front FHA Mortgage Insurance Premium of $24,195 depending on purchase price or appraised value. The information being displayed is for illustrative purposes only. Interest rates and funds available may change daily without notice. Please contact Longbridge Financial LLC for details about credit costs and terms.

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Co-op properties, rental homes, and rental apartments do not typically qualify. Contact a Longbridge specialist for more information.

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