Yesterday, FHA released Mortgagee Letter 2014-12, Home Equity Conversion Mortgage (HECM) Program: New Principal Limit Factors in which it has revised the Principal Limit Factors (PLF). This letter provides guidance which supersedes that contained in Mortgagee Letter 2014-11 released just last week.
The effective date of the new guidance is August 4, 2014.
When I attended the FHA condominium project approval roundtable in March 2014, the facilitator had mentioned that FHA would be working to overhaul the HECM program this year. Four of the last six Mortgagee Letters have been dedicated to HECM program changes.
The new Principal Limit Factors tables have been revised to address HECM borrowers with non-borrowing spouses under age 62. The tables are currently in Microsoft Excel spreadsheet format which allows for the importation into lenders’ technology or tools. The revised version of FHA’s HECM Calculation Software will be available for the effective date of the Letter on 8/4/14.
The Letter also states that lenders must allow borrowers the option of using the new Principal Limit Factors in cases where the Case Numbers have been assigned prior to 8/4/14 but have not yet closed.
The Condominium Project Approval Team at ReadySetLoan is dedicated to helping condominium projects across the nation to obtain their approvals with FHA and the VA or become recertified with FHA. We have assisted nearly 200 condominiums and we can help your association.
ReadySetLoan is an active member of the Connecticut and New England chapters of the Community Associations Institute (CAI) and is a frequent contributor to Common Interest Magazine as an expert in FHA/VA condominium project approvals.
Please contact us with any questions regarding FHA or VA condominium project approvals. You can email me at firstname.lastname@example.org or call me at 404-433-4565. I will be happy to answer any of your questions.
FHA/VA Condo Approval Specialist
404-433-4565 Cell Phone
860-644-3772 Fax Phone
Check out our article in Common Interest magazine on page 19!