Reverse Mortgage Lending Limit (2026): $1,249,125

The 2026 federal lending limit on a Home Equity Conversion Mortgage is $1,249,125 (HUD Mortgagee Letter 2025-22). The 2025 limit, still in effect for any FHA case number assigned during 2025, is $1,209,750. The figure that applies to a given borrower is determined by the date HUD assigns the case number, not the application date and not the closing date.

Last reviewed 2026-05-20

What is this limit?

The HECM lending limit is the maximum home value the Principal Limit Factor calculation uses. It is not the maximum loan amount. A borrower with a $2 million home and a borrower with a $1.25 million home produce roughly the same HECM principal limit because the PLF table reads the smaller of the appraised value and the lending limit, and that ceiling is currently $1,249,125.

Calling the figure a "loan limit" is a common misnomer. The principal limit a borrower can draw from a HECM is always smaller than the maximum claim amount, because the PLF multiplier ranges from roughly 0.30 for the youngest eligible borrowers to about 0.75 for borrowers in their late 90s, and because upfront FHA mortgage insurance, the origination fee, and other closing costs come out of the principal limit before disbursement. A 70-year-old with a $1.5 million home does not borrow $1.25 million; the home value caps at $1,249,125, the PLF (around 0.42 at current rates) is applied, and the principal limit lands near $525,000 before closing costs.

The federal authority for the cap is HUD's annual recalculation under the National Housing Act, Section 255(g), which sets the HECM maximum claim amount at 150% of the conforming loan limit published by the Federal Housing Finance Agency. The 2026 conforming limit is $832,750; 150% of that is $1,249,125. HUD codifies the figure in a December Mortgagee Letter each year; for 2026 that is ML 2025-22.

The PLF × Max Claim formula

The HECM principal limit math is straightforward once the lending limit is in place. The formula:

Principal Limit = PLF × min(home_value, lending_limit)
Net at Closing  = Principal Limit − upfront FHA MIP − origination fee − other closing costs

The PLF (Principal Limit Factor) is the HUD-published multiplier that depends on the youngest borrower's age and the expected interest rate at the time the case number is assigned. The expected rate is the 10-year Constant Maturity Treasury plus the lender's margin. The PLF table has a floor: HUD will not calculate below an expected rate of 3.0% (Mortgagee Letter 2017-12), so very low rate environments cap the PLF at the floor's row.

A worked example with the 2026 figures:

• Youngest borrower age: 70
• Home appraised value: $1,500,000
• Expected rate: 6.5%
• PLF (from HUD's current effective table at 6.5%, age 70): approximately 0.418

Step 1. Apply the lending limit: min($1,500,000, $1,249,125) = $1,249,125. Step 2. Apply the PLF: 0.418 × $1,249,125 = $522,134 principal limit. Step 3. Subtract closing costs. Upfront FHA MIP is 2.0% of the maximum claim amount: 0.02 × $1,249,125 = $24,983. Origination fee caps at $6,000 under HUD's schedule. Counseling, appraisal, title, and recording typically add $3,500 to $4,500. Step 4. Net available to the borrower at closing: roughly $487,000 to $488,000, structured as a lump sum, line of credit, monthly tenure or term payment, or a combination.

The same borrower on a $1,100,000 home — below the cap — would see step 1 read min($1,100,000, $1,249,125) = $1,100,000, producing a principal limit near $459,800 and a net closing figure near $429,000. The cap only binds when the home is worth more than $1,249,125.

Why the limit changes annually

HUD recalculates the HECM maximum claim amount each year using the FHFA conforming-loan-limit formula (150% of the national baseline conforming limit). The conforming limit moves with FHFA's House Price Index, so the HECM limit tracks single-family housing inflation with a year's lag. The 2024 limit was $1,149,825; 2025 was $1,209,750; 2026 is $1,249,125. The increase from 2025 to 2026 is 3.25%, reflecting the FHFA's measured house-price change over the relevant index period.

The published Mortgagee Letter typically arrives in late November or early December and takes effect for FHA case numbers assigned on or after January 1 of the following year. A borrower whose case number is assigned in late December locks the prior-year limit; one assigned January 2 or later picks up the new limit. Lenders watch the December calendar carefully because a borrower near the cap can gain (or lose) tens of thousands of dollars of principal limit depending on which side of the case-number-assignment date they fall on.

When the limit does not apply

The $1,249,125 ceiling is a HECM rule. It does not bind the jumbo / proprietary reverse mortgage programs, which are privately insured rather than FHA-insured. Jumbo programs run up to a $4 million loan cap under current HomeSafe (Finance of America Reverse), Platinum Preserve (Longbridge), and SecureEquity+ (Mutual of Omaha) published parameters. A borrower with a $3 million home who needs a principal limit above what the HECM cap allows is sized through a jumbo program against the full home value, subject to the program's age floor (typically 55, with NC and TX usually requiring 62 for HomeSafe) and rate type (typically fixed).

The detailed comparison of HECM-vs-jumbo lives on the jumbo pillar, and the per-program parameter cards carry each lender's exact published parameters.

See the jumbo programs →

Historical figures

| Year | HECM Maximum Claim Amount | HUD Mortgagee Letter | |---|---|---| | 2024 | $1,149,825 | ML 2023-19 | | 2025 | $1,209,750 | ML 2024-19 | | 2026 | $1,249,125 | ML 2025-22 |

Case-number rule applies in all three years: the figure is the one published by the ML in effect on the case-number-assignment date, not the application or closing date.