“What are the maximum reverse mortgage limits?” That’s perhaps the most common question posed by those 62 years or above who wish to release some of the equity they’ve built up in their residences. For those applying for an FHA-backed home equity conversion mortgage (HECM, pronounced “heck ’em”), calculating the maximum loan amount isn’t too difficult, because the rules are clearly laid out. However, there are two other types of reverse mortgage loans:
Jumbo or "proprietary" reverse mortgages
Jumbo reverse mortgages are offered by the private sector, and each company sets its own rules. These are generally more flexible than HECMs, and may be available to those who don’t qualify under the FHA’s program or who wish to borrow more than it allows. However, they’re less regulated than HECMs, and can be more expensive than the government-backed alternative. This makes careful comparison shopping essential.
Single purpose reverse mortgages
As the name implies, these can be used for only one purpose. and that’s usually home repairs, payment of property taxes or making energy-efficiency improvements. They tend to be offered by local government agencies or nonprofit organizations and are usually available to low-income borrowers only. Reverse mortgage interest rates are usually low (or even zero). Again, eligibility criteria and borrowing limits vary from lender to lender.
Because maximum reverse mortgage limits are often unique to each lender of jumbo/proprietary and single-purpose loans, it’s not possible to provide helpful guidelines — the information given below applies only to HECMs.