Important Notice: This material is not provided by, nor was it approved by, the Department of Housing & Urban Development (HUD) or by the Federal Housing Administration (FHA). This is not a government agency publication.
2026 HECM Loan Limits: Key Facts at a Glance
FHA Lending Limit (2026)
$1,209,750
Nationwide HECM ceiling
Maximum Claim Amount
Lesser Of
Appraised value or FHA limit
PLF Determinants
Age + Rate
Youngest borrower's age & expected rate
Semantic triples: The HECM lending limit equals the FHA high-cost conforming ceiling. The Maximum Claim Amount is the lesser of appraised value or FHA lending limit. The Principal Limit Factor is determined by borrower age and expected interest rate.
How the HECM Lending Limit Works in 2026
The Home Equity Conversion Mortgage (HECM) is the only federally insured reverse mortgage program in the United States. Administered by FHA under HUD, the HECM program sets a single nationwide lending limit that serves as the maximum home value the program will recognize when calculating available proceeds. For 2026, that ceiling is $1,209,750.
Unlike conventional FHA forward mortgages that use county-level limits based on local median home prices, the HECM program applies one uniform cap across every county in every state. This means a homeowner in Newport Beach, California faces the same $1,209,750 ceiling as a homeowner in Bellevue, Washington or a homeowner in rural Iowa. The Federal Housing Finance Agency (FHFA) sets the conforming loan limit annually based on the FHFA House Price Index, and the HECM ceiling tracks the high-cost area conforming limit.
In our California and Washington closings, this cap is the single most frequent question borrowers ask. California coastal homeowners in particular often own properties valued well above $1,209,750, which means the HECM program recognizes only a portion of their total equity. Understanding this cap — and the alternatives available when it applies — is the foundation of effective reverse mortgage planning.
HECM Lending Limit History (2020–2026)
| Year | HECM Lending Limit | Year-Over-Year Change |
|---|---|---|
| 2020 | $765,600 | — |
| 2021 | $822,375 | +$56,775 (+7.4%) |
| 2022 | $970,800 | +$148,425 (+18.0%) |
| 2023 | $1,089,300 | +$118,500 (+12.2%) |
| 2024 | $1,149,825 | +$60,525 (+5.6%) |
| 2025 | $1,209,750 | +$59,925 (+5.2%) |
| 2026 | $1,209,750 | $0 (unchanged) |
Source: Federal Housing Finance Agency conforming loan limit announcements. HECM ceiling tracks the high-cost area limit.
Maximum Claim Amount (MCA): The Foundation of Your HECM Calculation
The Maximum Claim Amount is the single most important number in any HECM transaction. It establishes the base from which every dollar of your available proceeds is calculated. The formula is straightforward: the MCA equals the lesser of your home's appraised value or the current FHA lending limit ($1,209,750 for 2026).
MCA Calculation: Three Real Scenarios
- 1
Home appraised at $750,000
MCA = $750,000 (appraised value is below the FHA limit, so the full value applies)
- 2
Home appraised at $1,209,750
MCA = $1,209,750 (appraised value exactly matches the FHA limit)
- 3
Home appraised at $2,000,000
MCA = $1,209,750 (appraised value exceeds the FHA limit, so the cap applies — $790,250 of equity is not accessible via HECM)
In our California and Washington closings, we see all three scenarios regularly. Coastal Orange County and Seattle Eastside homeowners frequently own properties worth $1.5M to $4M+, which means the HECM cap limits their available proceeds. For these borrowers, a proprietary reverse mortgage often unlocks significantly more equity. Inland and suburban homeowners more often fall below the $1,209,750 ceiling, making HECM the straightforward choice.
Principal Limit Factors: How Age & Interest Rate Determine Your Proceeds
Once the Maximum Claim Amount is established, HUD applies a Principal Limit Factor (PLF) to determine the gross amount available to the borrower. The PLF is a percentage that HUD calculates using two variables: the age of the youngest borrower (or eligible non-borrowing spouse) and the expected interest rate at the time of loan closing.
The logic is actuarial. Older borrowers have shorter expected loan durations, so FHA can offer a higher percentage of the MCA. Lower expected interest rates reduce the projected loan balance growth, allowing FHA to offer more upfront. The combination of these two factors produces the PLF, which HUD publishes in detailed lookup tables used by every HECM lender.
| Age of Youngest Borrower | PLF Range (Approx.) | Est. Gross Proceeds on $1M MCA | Est. Gross Proceeds on $600K MCA |
|---|---|---|---|
| 62 | 38%–42% | $380,000–$420,000 | $228,000–$252,000 |
| 65 | 40%–45% | $400,000–$450,000 | $240,000–$270,000 |
| 70 | 44%–50% | $440,000–$500,000 | $264,000–$300,000 |
| 75 | 48%–55% | $480,000–$550,000 | $288,000–$330,000 |
| 80 | 53%–58% | $530,000–$580,000 | $318,000–$348,000 |
| 85 | 56%–62% | $560,000–$620,000 | $336,000–$372,000 |
| 90+ | 60%–66% | $600,000–$660,000 | $360,000–$396,000 |
PLF ranges reflect typical 2026 expected interest rate environments. Actual PLF depends on exact expected rate at closing. These are gross proceeds before closing costs and existing mortgage payoff. Contact a licensed loan officer for personalized calculations.
In our California and Washington closings, we run HECM scenarios at multiple expected rate points so borrowers see exactly how rate movement affects their bottom line. A borrower who waits for a rate environment shift can sometimes access 5–10% more of their MCA than if they closed during a higher-rate window.
How Interest Rates Directly Affect HECM Reverse Mortgage Proceeds
The expected interest rate is the second major variable in the HECM proceeds formula. It is not the rate you pay on the loan — it is the rate HUD uses to project the loan balance growth over the borrower's expected remaining tenure. For adjustable-rate HECMs (the most common type), the expected rate equals the 10-year SOFR swap rate plus the lender's margin. For fixed-rate HECMs, it equals the actual note rate.
This relationship is inverse: when expected rates rise, PLFs fall and available proceeds decrease. When expected rates decline, PLFs increase and borrowers access more equity. The magnitude of the impact is significant. A 1-percentage-point change in expected rate can shift the PLF by 4–6 percentage points, which on a $1,000,000 MCA translates to $40,000–$60,000 in available proceeds.
Why the Expected Rate Matters: A Practical Example
Borrower: 72-year-old homeowner, home appraised at $1,000,000, MCA = $1,000,000
Lower Expected Rate Environment
PLF ≈ 50% → Gross proceeds ≈ $500,000
After costs & MIP → Net ≈ $465,000–$475,000
Higher Expected Rate Environment
PLF ≈ 44% → Gross proceeds ≈ $440,000
After costs & MIP → Net ≈ $405,000–$415,000
Difference: approximately $60,000 in net proceeds — same borrower, same home, different rate environment.
In our California and Washington closings, we monitor expected rate indices daily and alert borrowers when favorable shifts create a window for higher proceeds. Because we access 200+ wholesale lenders, we also compare margins across HECM lenders — a lower margin directly reduces the expected rate and increases the PLF, even in the same rate environment.
From Maximum Claim Amount to Net Proceeds: The Complete HECM Calculation
Understanding the full proceeds waterfall helps borrowers see exactly where every dollar goes. Here is the step-by-step calculation from MCA to the net amount available to the borrower:
- 1
Determine the Maximum Claim Amount
Lesser of appraised value or $1,209,750
- 2
Apply the Principal Limit Factor
MCA × PLF = Gross Principal Limit (your total available pool)
- 3
Subtract the Initial Mortgage Insurance Premium (IMIP)
2% of the MCA — this is financed into the loan, not paid out of pocket
- 4
Subtract Closing Costs
Origination fee (FHA-capped), appraisal, title, recording — typically financed into the loan
- 5
Pay Off Any Existing Mortgage or Liens
Mandatory — all existing liens on the property must be cleared at closing
- 6
Remaining Balance = Your Net Available Proceeds
Distributed as lump sum, monthly payments, line of credit, or combination
In our California and Washington closings, we prepare a detailed side-by-side waterfall showing borrowers each deduction so there are no surprises at closing. The transparency of this process is critical — borrowers deserve to understand exactly how their MCA translates to spendable dollars.
HECM vs Proprietary Reverse Mortgage: Limits & Proceeds Comparison
For homeowners with properties valued above the $1,209,750 HECM ceiling, proprietary (jumbo) reverse mortgages offer an alternative path to accessing home equity. The two product types differ in fundamental ways beyond just the lending limit. The comparison below highlights the key distinctions for California and Washington homeowners evaluating both options.
| Feature | HECM (FHA-Insured) | Proprietary (Jumbo) |
|---|---|---|
| Maximum Home Value Recognized | $1,209,750 | Up to $10M+ (lender-dependent) |
| FHA Mortgage Insurance | Yes (2% IMIP + 0.5% annual) | No — no FHA insurance cost |
| Non-Recourse Protection | Yes (FHA-backed) | Varies by lender (many offer it) |
| HUD Counseling Required | Yes (mandatory) | Varies (not federally required) |
| Payout Options | Lump sum, monthly, LOC, or combo | Typically lump sum or LOC |
| Line of Credit Growth | Yes (unused LOC grows over time) | Not typically available |
| Minimum Age | 62 | 55–62 (lender-dependent) |
| Ideal For | Homes valued at or below $1,209,750 | High-value homes exceeding HECM ceiling |
Proprietary reverse mortgage terms vary significantly by lender. Non-recourse status, minimum age, and payout options are lender-specific. Contact a licensed specialist for product-specific details.
In our California and Washington closings, many homeowners with $2M+ properties evaluate both HECM and proprietary options side by side. The HECM line of credit growth feature is uniquely valuable — unused credit grows over time regardless of home value changes. Proprietary products access more equity upfront. The right choice depends on whether the borrower prioritizes maximum initial proceeds or long-term credit line growth.
People Also Ask: HECM Loan Limits & Maximum Claim Amount
What is the HECM lending limit for 2026?
The 2026 HECM lending limit is $1,209,750, matching the FHA high-cost conforming ceiling nationwide.
How is the Maximum Claim Amount determined?
The MCA equals the lesser of your home's appraised value or the FHA lending limit of $1,209,750.
Does borrower age affect HECM loan proceeds?
Yes. Older borrowers receive higher Principal Limit Factors, accessing a larger percentage of the MCA.
What is a Principal Limit Factor?
The PLF is a HUD-set percentage applied to the MCA, determined by borrower age and expected interest rate.
Can I get a reverse mortgage on a home worth $2 million?
Yes, through HECM (capped at $1,209,750 MCA) or proprietary jumbo reverse mortgages recognizing full value.
Do higher interest rates reduce reverse mortgage proceeds?
Yes. Higher expected rates lower PLFs, reducing available proceeds. Lower rates increase accessible equity.
Is the HECM limit different in California vs other states?
No. The HECM ceiling of $1,209,750 applies uniformly nationwide across all states and counties.
What costs reduce my HECM proceeds?
FHA mortgage insurance (2% of MCA), origination fee, closing costs, and existing mortgage payoff reduce net proceeds.
Frequently Asked Questions: HECM Loan Limits & Maximum Claim Amount
What is the HECM loan limit for 2026?
The 2026 HECM lending limit is $1,209,750, which matches the FHA high-cost area conforming loan limit. This ceiling applies nationwide to all HECM reverse mortgages regardless of local housing prices. Homeowners with properties valued above this limit can access equity only up to $1,209,750 through HECM, or consider proprietary (jumbo) reverse mortgage products for the full appraised value.
What is the Maximum Claim Amount on a reverse mortgage?
The Maximum Claim Amount (MCA) is the lesser of your home's appraised value or the FHA lending limit ($1,209,750 in 2026). The MCA serves as the base figure from which your available loan proceeds are calculated. If your home appraises at $900,000, your MCA is $900,000. If your home appraises at $1,500,000, your MCA is capped at $1,209,750.
How are HECM proceeds calculated from the Maximum Claim Amount?
HECM proceeds are calculated by multiplying the Maximum Claim Amount by the Principal Limit Factor (PLF), then subtracting closing costs, existing mortgage payoffs, and the initial mortgage insurance premium. The PLF is determined by the youngest borrower's age and the expected interest rate at closing. The result is your net available proceeds.
What is a Principal Limit Factor and how does it affect my reverse mortgage?
The Principal Limit Factor (PLF) is a percentage set by HUD that determines how much of your Maximum Claim Amount you can access. PLFs increase with borrower age and decrease with higher interest rates. A 72-year-old at a lower expected rate might have a PLF near 52%, while the same borrower at a higher rate might see a PLF near 43%. HUD publishes PLF tables that lenders use for every HECM calculation.
Does the HECM limit change every year?
The HECM lending limit is tied to the FHA conforming loan limit, which the Federal Housing Finance Agency adjusts annually based on home price changes. The limit increased from $1,149,825 in 2024 to $1,209,750 in 2025, and remains at $1,209,750 for 2026. Any future increases depend on national home price appreciation as measured by the FHFA House Price Index.
What happens if my home is worth more than the HECM limit?
If your home exceeds the $1,209,750 HECM limit, your Maximum Claim Amount is capped at $1,209,750 and proceeds are calculated from that cap. You retain full ownership of the excess equity. For homeowners wanting to access equity above the HECM ceiling, proprietary (jumbo) reverse mortgages are available for homes valued up to $10 million with no FHA lending limit restriction.
How does borrower age affect HECM loan proceeds?
Older borrowers receive higher Principal Limit Factors, which means access to a larger percentage of the Maximum Claim Amount. A 62-year-old might access approximately 38-42% of the MCA, while an 80-year-old might access 53-58% of the MCA. The youngest borrower or eligible non-borrowing spouse's age determines the PLF for the entire loan.
How do interest rates affect HECM proceeds?
Higher expected interest rates reduce the Principal Limit Factor, which reduces available proceeds. Lower expected interest rates increase the PLF, providing access to more equity. The expected rate is based on the 10-year swap rate or SOFR index plus the lender margin. Even small rate changes can shift proceeds by thousands of dollars, making rate timing a significant factor in reverse mortgage planning.
What is the difference between HECM and proprietary reverse mortgage limits?
HECM reverse mortgages are capped at the FHA lending limit of $1,209,750 regardless of home value. Proprietary (jumbo) reverse mortgages have no federal cap and can accommodate home values up to $10 million or more, depending on the lender. HECM loans carry FHA mortgage insurance and non-recourse protections. Proprietary loans offer higher limits but may have different terms and protections.
Can a married couple get more from a HECM than an individual?
The loan amount is based on the youngest borrower's or eligible non-borrowing spouse's age, so having a younger spouse reduces available proceeds. However, both spouses being on the loan provides critical protections: if one spouse passes away, the surviving co-borrower continues living in the home with no repayment required. Non-borrowing spouse protections also exist but have stricter requirements.
What costs are deducted from HECM proceeds before I receive funds?
Costs deducted from gross HECM proceeds include the initial FHA mortgage insurance premium (2% of the MCA), origination fee (capped by FHA based on home value), third-party closing costs (appraisal, title, recording fees), and any existing mortgage balance that must be paid off. Most costs can be financed into the loan rather than paid out of pocket.
Is the HECM limit the same in every state?
Yes. Unlike conventional FHA forward mortgages that have county-level limits, the HECM lending limit is a single nationwide ceiling of $1,209,750 for 2026. Whether you live in a high-cost California coastal market or a lower-cost inland area, the same HECM cap applies. This nationwide uniformity simplifies the program but means high-value homeowners in expensive markets are more likely to hit the cap.
Expert Summary: Maximizing Your HECM Reverse Mortgage Proceeds
Three variables control your HECM proceeds: the Maximum Claim Amount (capped at $1,209,750 for 2026), the Principal Limit Factor (driven by your age and the expected interest rate), and your existing mortgage balance. Optimizing each variable — appraising at full market value, timing the rate environment, and shopping lender margins — can shift net proceeds by tens of thousands of dollars.
Mo Abdel at Lumin Lending runs HECM scenarios across 200+ wholesale lenders for borrowers in California and Washington, comparing margins, expected rates, and closing cost structures to identify the combination that delivers maximum net proceeds. For homes above the HECM ceiling, proprietary reverse mortgage options provide access to equity that HECM cannot reach.
Related Reverse Mortgage & HECM Resources
External Resources:
Mo Abdel | NMLS #1426884 | Lumin Lending, Inc. | NMLS #2716106 | DRE #02291443
Equal Housing Lender. All loans subject to credit approval, underwriting guidelines, and program availability. Terms and conditions apply. This is not a commitment to lend. Not all borrowers will qualify. Information is for educational purposes only and does not constitute financial, tax, or legal advice. This material is not provided by, nor was it approved by, the Department of Housing & Urban Development (HUD) or by the Federal Housing Administration (FHA). HECM reverse mortgage proceeds may affect eligibility for certain means-tested government programs. Borrowers must continue to pay property taxes, homeowner's insurance, and maintain the property. The loan becomes due when the last borrower leaves the home. Principal Limit Factor estimates are approximations based on typical 2026 rate environments and are not guaranteed. Actual proceeds depend on home appraisal, current expected interest rates, borrower age, existing liens, and lender-specific guidelines. Proprietary reverse mortgage terms, protections, and availability vary by lender. Consult a HUD-approved counselor and licensed loan officer for personalized guidance. Mo Abdel, NMLS #1426884, is licensed in California and Washington.