HECM Cap Suspension Extended

28 Jun

The suspension of the cap on the number of Home Equity Conversion Mortgage (HECM) reverse mortgages that can be endorsed by the FHA has been extended again.

The House Appropriations Committee passed a Fiscal Year 2014 appropriations bill for the U.S. Department of Housing and Urban Development that extends by one year the suspension of the cap on the number of HECMs that the Federal Housing Administration can insure.

The bill – approved by a 28-20 vote – would extend the suspension until September 30, 2014.

As originally enacted in 1987, the HECM statute contained a volume cap of 2,500 loans.  That was increased by various increments several times, and finally to 275,000 loans permitted in 2006. Since that time, the cap has not increased but has been temporarily suspended, and the suspension was extended numerous times.

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