FHA Condo Approval Specialist: FHA Reverse Mortgage New Principal Limit Factors

FHA Reverse Mortgage New Principal Limit Factors

Reverse Mortgage (HECM) New Principal Limit Factors

fha hecmYesterday, 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 askeric@readysetloan.com or call me at 404-433-4565. I will be happy to answer any of your questions.


FHA/VA Condo Approval Specialist

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Comment balloon 7 commentsReadySetLoan Condo Approval Team • June 28 2014 05:50AM


Good Morning Eric, thank you for keeping us all informed.  This is helpful.

Posted by Captain Wayne - Rowlett Real Estate School, Rowlett Real Estate School / Owner and Instructor (REcampus Fully Accredited Florida ONLINE & Classroom Training in Destin, Pensacola Florida) over 4 years ago

Hi Captain Wayne - I am not a loan officer but work to keep abreast on FHA programs so that I can speak intelligently to condominium associations about FHA project approvals.

Posted by ReadySetLoan Condo Approval Team, The FHA/VA Condo Project Approval Specialists (ReadySetLoan Condo Team LLC) over 4 years ago

Hi Eric.  So a couple qualifies for a reverse mortgage if one of them is under 62?

Posted by Conrad Allen, Webster, Ma, Realtor (Re/Max Professional Associates) over 4 years ago

Good morning Eric. Will share the information with Kit, not sure if he is on top of this one. Thank you for keeping all of us, right up to date.

Posted by Joe Petrowsky, Your Mortgage Consultant for Life (Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709) over 4 years ago

Hi Conrad - yes, but I am not certain of the nuances.  I know that non-borrowing spouses can be under 62.  The PLF chart goes all the way down to 18 years old.  I also know that non-borrowing spouses may remain in the home after the borrower passes if he/she meets certain criteria, such has having been married to the deceased borrower since the loan's inception and he/she has the legal right to remain in the property.

Hi Joe - If I know Kit, I'm sure he's digested this Mortgagee Letter!

Posted by ReadySetLoan Condo Approval Team, The FHA/VA Condo Project Approval Specialists (ReadySetLoan Condo Team LLC) over 4 years ago

Hi, Eric.  What I could figure out is what the new limits might be.  These guys need a remedial writing course.

Posted by Patricia Kennedy, Home in the Capital (RLAH Real Estate) over 4 years ago

Hi Patricia - unfortunately, the Mortgagee Letters are legal documents and must be written as such...which makes them very difficult to read!

Posted by ReadySetLoan Condo Approval Team, The FHA/VA Condo Project Approval Specialists (ReadySetLoan Condo Team LLC) over 4 years ago