Reverse mortgages can allow a homeowner to get a portion or all of his home’s equity and turn them into monthly payments. There are other ways to use this loan as well, but the federal government’s Farm Home Administration sets a fixed amount on the sum of money a person can borrow this way. The amount does not change regardless of where a person lives.
Maximum FHA Reverse Mortgage Amount
Most homeowner in rural areas do not need to worry if the amount they take out exceeds the maximum amount allowed. A home owner can borrow up to $625,000 of the value of his home in a home equity conversion loan before hitting this cap. Homes in more urban areas may come with this price tag, but only houses with a lot of land or of a larger size will come with this price in more rural areas.
If the home is less than that, the Maximum FHA mortgage amount is far easier to figure out. It’s also a highly variable number. A home owner can borrow up to the current market value of the house. The rest of the loan items work exactly the same.
Why a Maximum Value on an FHA Reverse Mortgage?
Reverse Mortgages are designed to help retirees with limited expenses meet their day-to-day expenses or make home improvements. A homeowner whose home is valued over the maximum limit does not need this type of loan in the eyes of the Federal Government. He or she can still borrow against the equity of his house, he just cannot exceed the cap.
The maximum FHA reverse mortgage lending amount did not change in 2010, but it does change every so often. The Housing and Urban Development department’s web site updates this number every year. When in doubt, contact the agency or the website to get the current numbers.
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