The Federal Housing Administration has just announced that it will increase the maximum claim amount for Home Equity Conversion Mortgages in calendar year 2025 from $1,149,825 to $1,209,750, effective for case numbers assigned on or after January 1, 2025.
This new maximum claim amount is also applicable to Freddie Mac’s special exception areas of Alaska, Hawaii, Guam and the Virgin Islands.
Details were published in Mortgagee Letter 2024-22 and will be included in a future Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) release.
It is important to note that the single national loan limit for HECM (as opposed to the area-by-area limits,) is something that exists because of NRMLA’s advocacy efforts. NRMLA successfully persuaded Congress, and key HUD officials, that the area limits used for forward mortgages did not really make sense for HECMs.
Area-by-area limits empower consumers to buy an equivalent home wherever they are. Such a home costs a lot less in St. Louis than in Los Angeles, or in Buffalo, NY than the NYC metro area.
On the other hand, a HECM helps a homeowner draw cash from their accumulated equity to age in place. The costs of aging, prescription drugs, durable medical equipment, adapting a home with stair glides, etc. do not differ regionally. NRMLA successfully argued that a homeowner with a higher value property in an area with a low FHA loan limit should not be penalized by only being able to borrow based on the forward mortgage loan limit.
