The Reverse Mortgage Lending Limit For 2025 Is A Big Number

The FHA lending limit for 2025 is a big number.

If you'd like to estimate how much you can get from a reverse mortgage, check out our free calculator here:

https://www.myhecm.com/calculators/he...

FHA periodically revises the HECM reverse mortgage lending limit to reflect current real estate market conditions.

The HECM lending limit was $1,149,825 for 2024, but will now increase to $1,209,750 for case numbers issued on or after January 1, 2025. This is a massive number that reflects the huge amount of home price inflation we've seen over the last ten to fifteen years.

The change means that many homeowners with home values higher than the lending limit will likely qualify for significantly more money from a HECM reverse mortgage.

The term “lending limit” is somewhat of a misnomer. The lending limit is not a limit on how much you can borrow from a reverse mortgage. Your reverse mortgage will not be called due and you will not be asked to start making payments if your loan balance eventually reaches the limit.

The lending limit is simply a cap on the appraised value for purposes of calculating proceeds. If the lending limit cap increases, then it means homeowners with higher value homes will have access to more equity than before.

The change has no impact on homeowners with home values less than or equal to the old lending limit.

The one downside with the higher loan limit for 2025 is that it also increases the maximum IMIP premium, which is based on the lending limit if your home value is equal to or greater than the lending limit. The maximum IMIP premium will increase from $22,997 in 2023 to $24,195 for 2025.

There is no change to the IMIP premium if your home value is less than or equal to last year's lending limit.

IMIP premiums are used by FHA to insure the HECM reverse mortgage and make it a non recourse loan. The most that will ever have to be repaid is the value of your home, even if it's not worth enough to pay off the entire balance.

FHA covers any shortage using money collected from IMIP premiums.