Experts Weigh In: 2025 HECM Limits and the Perks of Reverse Mortgages!
Last week, the Federal Housing Administration (FHA) made headlines with a bold announcement: the Home Equity Conversion Mortgage (HECM) limit for 2025 will soar to an impressive $1,209,750. This marks the ninth consecutive year of growth, driven by the relentless rise in home prices, creating a unified national limit for all HECM loans.
While this increased limit expands the borrowing potential for those eyeing a HECM loan, opinions within the industry are mixed. Some analysts are cautiously optimistic, noting that high interest rates still pose challenges despite a recent easing trend.
Yet, the overall sentiment is leaning towards the positive side. Voices from the reverse mortgage sector, including participants who shared insights with industry experts, are buzzing with enthusiasm online.
At Finance of America (FOA), the new limit is seen as a game changer, opening doors to innovative uses for reverse mortgage products beyond the standard federally insured HECM options.
“This is a win for the industry! It empowers more older homeowners to access their home equity through reverse mortgages, showcasing the versatility of proprietary products,” stated Jonathan Scarpati, FOA’s senior vice president of wholesale production.
“For those exceeding the loan limit, our proprietary offerings can bridge the gap — like our HomeSafe loan for higher-value properties and our HomeSafe Second loan for those seeking to tap into less equity.”
The HomeSafe product lineup, particularly the HomeSafe Second, has been a hot topic at FOA, reflecting their strategic focus. “HECMs work well for some, but our partners need a broader range of options to reach more homeowners,” Scarpati emphasized.
Lisa Moriello, national retail reverse sales manager at loanDepot, echoed this optimism. “The increase to the HECM limit is thrilling news for reverse mortgage borrowers,” she stated. “Incorporating a reverse mortgage into retirement planning is crucial today, and this change unlocks more opportunities for qualified borrowers eyeing luxury homes, new constructions, and existing properties.”
The raised HECM limit also signals the FHA’s commitment to empowering individuals to stay in their homes for a lifetime, she added.
However, some industry experts are approaching this increase with caution. Peter Sciandra, executive vice president of reverse lending and secondary marketing at Fairway Independent Mortgage Corp, gathered insights from his team to evaluate the implications of the limit for the upcoming year.
“We believe this is positive as it broadens the industry’s reach to more individuals who can benefit from a reverse loan. This includes those looking to purchase higher-value homes that were previously out of reach, allowing us to compete effectively in affluent markets,” Sciandra remarked. “Our focus on HECM for Purchase positions us well for this expansion.”
Though some express concerns that the increased limit could intensify issues related to high upfront costs for HECM loans, Sciandra remains undecided on this perspective.
Social media chatter reflects a wave of positivity. “This is fantastic news for HECM borrowers with high-value homes, allowing them to access even more equity!” shared Bob Garczewski, national account manager at Simple Reverse, in a recent post.
Rick Rodriguez, senior vice president of reverse mortgage lending at VIP Mortgage, also celebrated the news. “This is excellent for homeowners aged 62 and above considering a reverse mortgage. The higher limit enhances access to home equity, providing more financial flexibility for retirement planning and allowing individuals to truly enjoy their golden years,” he stated.
Rodriguez further noted that this increase illustrates the FHA’s dedication to the HECM program, ensuring lenders can maximize proceeds to keep pace with home-price growth. “It’s refreshing to see the FHA advancing the HECM initiative,” he concluded.
