In the world of government loans I never ceased to be surprised. In a kind of “under the radar” action the FHA Reverse Mortgage maximum loan amount of $625,500 will stay in effect permanently even while the FHA and “conforming” conventional loan amounts revert back to a maximum amount of $417,000.

As a result of the fiannical crisis the government took action to increase loan amounts to prop up and sustain the important housing sector. As of October 1st of this year, as previously posted, the FHA and Fannie Mae loan amounts are going down while the Reverse Mortgage loan amount remains at its new, higher loan level of $625,500.

With this higher loan amount more seniors will have access to Reverse Mortgage financing – for both purchases and refinances.

There are two basic types of Reverse Mortgages: Fixed and Adjustable. These loans differ in just how the loan dollars are disbursed. With a fixed-rate loan the senior obtains use of all of the cash up-front. With the ARM product the senior can take part or all (or none) of the funds at closing and can choose to let money accumulate and accumulate interest until the funds are needed – or the senior can choose to receive regular monthly payments or can just take money whenever it is needed.

In any event, this boost to the Reverse Mortgage loan amount will benefit seniors across the country who reside in high-cost markets.

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