Hello Bob, The HUD Lending Limit of $679,650 is the maximum amount that HUD will consider for the property value when determining the Principal Limit or loan amount that you will receive under the program. $679,650 is not the loan amount you will receive. And that is not to say that this is the maximum valued home you can have and get a reverse mortgage, it just means that under the HUD program, you keep receiving a higher benefit with increased property value until you reach this limit and then you do not receive any higher benefit amount even if your house is worth over $679,650. Let me start from the beginning. The HUD Home Equity Conversion Mortgage (HECM or "Heck-um") limits the benefit amount (loan amount) that they will give to any borrower based on the lower of the appraised value, the purchase price for a purchase transaction, or the HUD lending limit, whichever is less. They take this amount and along with the borrower(s) age(s) and interest rates and determine the Principal Limit (the actual amount you will receive) based on their formulas. Borrowers receive a percentage of the appraised value or lending limit which varies based on their ages and the interest rates. This benefit or loan amount currently starts around 42% of the $679,650 for 62 year old borrowers and goes up for older borrowers. This percentage can go up or down as rates increase or decrease. However, having said that, these are the numbers for the HUD HECM program only. There are also jumbo or proprietary (private) reverse mortgage programs that do not cap their lending limit at $679,650. These programs often do not make sense for borrowers with lower valued homes because the proprietary programs typically have lower loan to value limitations. Where they really make sense though is for higher valued homes. So while HUD may give you 48% for your age, the proprietary program might only be 33% and when you have a home valued at $675,000, the HUD program makes all the sense in the world. However, when you have a home worth $1,500,000, now instead of 48% of $679,650 or $326,232, the jumbo program might give you 33% of the full $1,500,000 or $495,000. Of course these numbers are subject to change based on your age. Will you still get enough to pay off your current loan of $625,000 or more money to use for other purposes? I can't say. But you can find out quickly, easily and without obligation by following me this way and allow me to show you what a jumbo reverse mortgage can do for you!

Hi Nancy, I would recommend that you having that 1098 form reviewed by your tax professional as we are not able to offer specific tax advice. You may want to also point your tax professional to our most recent post on reverse mortgages and tax reform.