Every year HUD reviews the national reverse mortgage lending limit for the HECM program and determines the amount based on home prices for the preceding year.  Based on this data, the 2023 HECM reverse mortgage lending limit will be $1,089,300.

2022 vs 2023 Reverse Mortgage Limit Comparison

AGELoan to value2022 Limits ($970,800)2023 Limits ($1,089,300)Increase ($)
6238.2%$370,845$416,112$45,267
6540.3%$391,232$438,988$47,756
7043.9%$426,181$478,202$52,021
7546.7%$453,363$508,703$55,340
8051.0%$495,108$555,543$60,435
85 57.0%$553,356$620,901$67,545
(Table based on $1,089,300 or higher property value and illustrates amount of additional funds made available using new 2023 HECM lending limit. Rate used in illustration: 2.00% 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 it meant that 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.

History of Reverse Mortgage Limits

YearNational HECM Limit Limit Increase (%)
2016$417,00014.9%
2017$636,15052.5%
2018$679,6506.8%
2019$726,5256.8%
2020$765,6005.37%
2021$822,3757.41%
2022$970,80018%
2023$1,089,30012.2%
*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

Covid Impact on Appraised Values & Lending Limits

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!

This was the most significant single increase that was not a result of a legislative change in the way the limit would be determined (in 2008, the limit was raised because of the Economic Stimulus Act that established the national limit of $417,000, and in 2009, the increase was the result of the House Economic Recovery Act).

This was a single-limit increase based solely on the appreciation of home prices.

Comparing HECM to Jumbo Reverse Mortgage Limits

This is the first time the HUD Home Equity Conversion Mortgage (HECM or “Heck-um”) limit has hit the $1,000,000+ mark.  The 2023 limit increase gives borrowers with properties valued at more than $1,250,000 a viable option to proprietary or jumbo reverse mortgage options and one of the highest percentage increases in the past several years!

2023 HECM vs Jumbo Comparison

Home Value2023 HECM2023 JUMBONET Benefit ($)
$1,089,300$465,131$377,987-$87,144
$1,200,000$465,131$415,200-$49,931
$1,300,000$465,131$449,800-$15,331
$1,400,000$465,131$484,400$19,269
$1,500,000$465,131$519,000$53,869
$1,750,000$465,131$605,500$140,369
$2,000,000$465,131$692,000$226,869
$2,250,000$465,131$778,500$313,369
$2,500,000$465,131$865,000$399,869
$2,750,000$465,131$951,500$486,369
$3,000,000$465,131$1,038,000$572,869
(Table based on borrower age 70. HECM Rate used in illustration: 2.00% CMT Margin. Home Equity Conversion Mortgage loan-to-value 42.7%, Jumbo loan-to-value 34.6%)

Borrowers with houses worth more than $1,089,300 may indeed 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.

First Time in History, HECM Limit Reaches $1M+

So now, in 2023, the new limit will be $1,089,300.  This is an increase of $118,500!  This increase is based on data derived from the growth of house prices prior to 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 2023 reverse mortgage lending limit is a welcome bit of good news!

Source: 

2023 HECM limit details were published in Mortgagee Letter 2022-21 and will be included in a future Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) release.