Author: bayreverse

Great news! FHA has raised HECM (a government-backed reverse mortgage for homeowners aged 62 and older)claim amounts(the maximum home value the loan can cover) to $1,209,750!

Are you or a loved one considering a reverse mortgage in 2025? Big changes to the Home Equity Conversion Mortgage (HECM) program are making it easier for seniors to tap into home equity while staying protected. From higher loan limits to new borrower safeguards, here’s what you need to know about these exciting updates!

This increase, effective January 1, 2025, reflects home price appreciation and allows borrowers with higher-value properties to access more equity. The higher limit is seen as beneficial for homeowners, especially those with larger existing mortgages.

If you own a high-value home, the new $1,209,750 limit means you can access more cash to fund retirement or pay off debts. For those worried about unpaid fees, flexible repayment plans offer peace of mind.

FHA also Enhanced Borrower Protections

Repayment Plans: New rules effective in 2025 allow borrowers facing financial challenges to use repayment plans for larger owed amounts or unpaid HOA/condo fees, reducing the risk of immediate foreclosure. This aims to help borrowers stay in their homes longer.

Cash-for-Keys Incentives: As of March 25, 2024, mortgage servicers can offer increased incentives (up to $7,500, plus an additional $5,000 for probate costs) for borrowers or heirs opting for alternatives to foreclosure, such as deed-in-lieu or short sales. This facilitates smoother transitions and reduces financial strain.

Click link below to qualify!

QUALIFY FOR A REVERSE MORTGAGE

HUD will be changing the rules on Reverse Mortgages.

Here are the changes coming for loans made after Oct. 2:

There will be new limits on the total amount you can borrow through a reverse mortgage. Today, the average reverse mortgage borrower can draw 64% of home equity, but that will drop to about 58%, according to the Wall Street Journal.

The upfront mortgage insurance premium for most reverse mortgage borrowers will soar. Premiums for those taking less than 60% of the loan proceeds upfront will go from the current 0.5% to 2% of the “maximum claim amount.”

The upfront mortgage insurance premium will fall slightly for people taking more than 60% of the loan proceeds upfront. It will drop from 2.5% to 2.0%.

Annual mortgage insurance premiums will drop. The annual premium will fall from today’s 1.25% of the outstanding balance to 0.5%. This change “preserves more equity for borrowers over time by slowing the rate at which the loan balance grows,” the HUD press release said.

The reverse mortgage industry hopes to be able to work with HUD to prevent or scale back the upcoming changes and adopting other changes. “There are greater opportunities to make the program work efficiently rather than reduce the benefit to consumers and charge them more,” said Bell.

One idea the industry favors: finding ways to make the process quicker, less expensive and more efficient if a home with a reverse mortgage goes into foreclosure.