As the calendar turns to 2024, the Federal Housing Administration (FHA) has made a pivotal announcement that is set to impact the landscape of Home Equity Conversion Mortgages (HECM).  The maximum claim amount for HECMs in 2024 has been increased from $1,089,300 to $1,149,825, effective for case numbers assigned from January 1, 2024, onwards.

ARLO presenting the all-time high 2024 reverse mortgage limits

Our guide breaks down the FHA’s decision in an easy-to-understand format.  We’ve included handy tables comparing the reverse mortgage loan limits of 2023 and 2024, showing you exactly how much more you might be able to borrow.  Plus, a “2024 Loan-To-Value Comparison” table illustrates how much of your home’s value you can tap into with these new lending limits.

This article, backed by data and expert analysis, is designed to be your one-stop guide to understanding the changes in HECM limits for 2024.

Comparison of Reverse Mortgage Limits: 2023 vs. 2024

AGELoan to value2023 Limits ($1,089,300)2024 Limits ($1,149,825)Increase ($)
6235.0%$382,000$402,438$20,438
6537.1%$405,219$426,585$21,366
7040.8%$445,523$468,128$22,605
7543.7%$477,000$502,473$23,605
8048.1%$525,042$553,065$28,023
85 54.3%$592,142$624,354$32,212
9061.3%$668,830$704,842$36,012
(Table based on $1,149,825 or higher property value and illustrates the amount of additional funds made available using the new 2024 HECM lending limit. The expected rate used in the illustration was 6.18%/1.75% CMT Margin)

History of HECM Lending Limits

HUD Lending limits typically move with home values.  After the change in 2008 that first moved the lending limits to a national limit of $417,000 (from regional limits based on regional values), the limit took another significant increase in 2009 to $625,500 due to the Housing and Economic Recovery Act.

It stayed at this limit for the next eight years until 2017, when it rose just $10,650 to $636,150.  It was not a significant increase, but the housing price was increasing.  And from there, the increases kept coming.  In 2018, the HUD HECM limit went to $679,650, an increase of $43,500.  In 2019, the HECM lending limit rose another $46,875 to $726,525, and reverse mortgage borrowers started to enjoy the benefits of refinancing their HECM loans.  In 2020, the limit increased again to $756,600 – up $39,075.

Then, during the Covid pandemic, property values continued increasing.  In 2021, the HECM limit increased to $822,375, representing an increase of $56,775.  Then, against all odds, the country exhibited massive housing price growth in 2022, and the HUD limit grew to $970,800, a single increase of $148,425!

Continuing this trend, in 2023, the HECM lending limit saw another substantial increase, reaching $1,089,300.  This significant rise reflects the ongoing growth in housing prices and market dynamics.  The limit has been set to increase even further in 2024 to $1,149,825.  These continuous increases indicate a robust housing market and provide more opportunities for borrowers seeking reverse mortgages.

YearNational HECM Limit Limit Increase (%)
2016$417,00014.9%
2017$636,15052.5%
2018$679,6506.8%
2019$726,525
6.8%
2020$765,6005.37%
2021$822,3757.41%
2022$970,80018%
2023$1,089,30012.2%
2024$1,149,8255.56%
*HUD implemented a national limit in 2016 that replaced regional limits that in some cases were much lower.

Also See: History of the Reverse Mortgage – 1969 to Present Day Facts

Comparing HECM to Jumbo Reverse Mortgage Limits

This is the second time the HUD Home Equity Conversion Mortgage (HECM or “Heck-um”) limit has hit the $1,000,000+ mark.  The 2024 limit increase gives borrowers with properties valued at more than $1,000,000 an alternate option to proprietary or jumbo reverse mortgage programs and one of the highest percentage increases in the past several years!

2024 Loan-To-Value Comparison: HECM vs Jumbo Loans

Home Value2024 HECM2024 JUMBONET Benefit ($)
$1,149,825$445,523$409,337-$36,186
$1,200,000$445,523$427,200-$18,323
$1,300,000$445,523$462,800$17,277
$1,400,000$445,523$498,400$52,877
$1,500,000$445,523$534,000$88,477
$1,750,000$445,523$623,000$177,477
$2,000,000$445,523$712,000$266,477
$2,250,000$445,523$801,000$355,477
$2,500,000$445,523$890,000$444,477
$2,750,000$445,523$979,000$533,477
$3,000,000$445,523$1,068,000$622,477
(Table based on borrower age 70. HECM Rate used in illustration: 1.75% CMT Margin. Home Equity Conversion Mortgage loan-to-value 40.8%, Jumbo loan-to-value 35.6%)

Borrowers with houses worth more than $1,149,825 may consider a proprietary product instead of a HECM once the property reaches or exceeds that limit.  Still, since the HUD HECM program allows borrowers a greater percentage of their property’s value in the loan amount, the loan makes sense for most borrowers even beyond the HUD lending limit in most cases.

We say “most cases” because the proprietary programs still allow borrowers to access cash differently than the HUD programs.  Hence, it is always best to talk to your reverse mortgage specialist to determine which programs will meet your needs.

Summary

So, in 2024, the new limit will be $1,149,825—an increase of $60,525! This increase is based on data derived from the growth of house prices before the rise in interest rates, but many markets are already seeing signs of price softening.

Suppose the prices erode further, as is almost certainly the case with higher interest rates, future lending limits may be reduced.  The higher lending limits help some borrowers with higher existing mortgages to retire, especially at a time when interest rates are chipping away at borrowers’ available principal limits.

Many borrowers are surprised that the loan amounts they were eligible for at the beginning of the year are different now after the inflationary changes and interest rate increases.  For those borrowers with higher-valued homes, a rise in the 2024 reverse mortgage lending limit is a welcome bit of good news!

Lending Limit FAQs

Q.

What is the maximum reverse mortgage loan limit for 2024?

The maximum reverse mortgage loan limit will be $1,149,825 in 2024.  The limit on the reverse mortgage is not the maximum loan amount but the maximum property value that can be used to calculate your available loan amount.

Q.

Would a reverse mortgage refinance in 2024 be worthwhile?

If you receive additional proceeds, a reverse mortgage refinance in 2024 could be worthwhile.  A refinance may be worthwhile as long as the new loan provides you with more funds than your current loan to pass the required 5x benefit tests.
Q.

What is the maximum amount you can get on a HECM reverse mortgage?

3 factors will determine the maximum amount you can get on a HECM reverse mortgage.  The age of the youngest borrower or spouse, the value of your home or the current HUD limit ($1,149,825 for 2024), whichever is less, and the current rates in effect when you apply for your reverse mortgage.  The older you are, the higher the loan-to-value percentage will be, the lower the rates, and the higher the loan-to-value will be.
Q.

How is the HECM limit decided, and by whom?

The HECM limit is decided by the Department of Housing and Urban Development (HUD).  HUD currently takes 150% of the Federal Home Loan Mortgage Corporation’s (Freddie Mac) national conforming limit.  For 2024, the Freddie Mac Conforming Limit will be $766,550 so $766,550 x 1.50 = $1,149,825.
Q.

How is the principal limit determined on a reverse mortgage?

3 factors will determine the principal limit on a reverse mortgage.  The age of the youngest borrower or spouse, the value of your home or the current HUD limit ($1,149,825 for 2024), whichever is less, and the current rates in effect when you apply for your reverse mortgage.  The older you are, the higher the loan-to-value percentage will be, the lower the rates, and the higher the loan-to-value will be.

Source: 

2024 HECM limit details were published in Mortgagee Letter 2023-22 and will be included in a future Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) release.