When is the maximum claim amount for HECM loans determined?

The maximum claim amounts on all Home Equity Conversion Mortgage (HECM) cases including those in the lender's portfolio are determined by the mortgage closing date rather than the date the case number is assigned.

This allows for larger equity payments when FHA's mortgage limits increase between the date the case number is assigned and the date the loan closes provided the property's appraised value meets or exceeds the new jurisdictional FHA maximum mortgage.

Mortgagee Letter 01-18 is available at https://www.hud.gov/program_offices/administration/hudclips/letters/mortgagee

HECM Final Rule:   Federal Register ยง206.3      https://www.govinfo.gov/content/pkg/FR-2017-01-19/pdf/2017-01044.pdf

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: KA-02105