The HECM lending limit for 2026
The single national cap on the home value a HECM can count, where it comes from, when it changes, and what it does to the loan on an expensive home.
Cash you can use in the first 12 months
$266,559
Then $198,361 more after month 12, growing at 6.49 % a year while unused.
| Factor at age 73, 6.625 % | 0.397 |
| Maximum claim amount | $1,249,125 |
| Principal limit (line 1) | $495,903 |
| Upfront MIP, 2 % (line 3) | $24,983 |
| Origination fee | $6,000 |
| Other closing costs | $0 |
| Mortgage paid off (line 5) | $0 |
| Mandatory obligations (line 10) | $30,983 |
| First-year limit (line 21) | $297,542 |
| Net principal limit (line 25) | $464,920 |
The home counts for $1,249,125, the 2026 FHA limit. Expected rate 6.65 % (10-year Treasury + margin), read as 6.625 % in HUD's table. Estimate, not a loan offer.
| Year | Age | Loan balance | Unused credit line |
|---|---|---|---|
| 1 | 74 | $33,054 | $496,007 |
| 2 | 75 | $35,264 | $529,173 |
| 3 | 76 | $37,622 | $564,557 |
| 5 | 78 | $42,822 | $642,580 |
| 10 | 83 | $59,185 | $888,129 |
| 15 | 88 | $81,802 | $1,227,509 |
| 20 | 93 | $113,061 | $1,696,577 |
| 25 | 98 | $156,265 | $2,344,890 |
| 30 | 103 | $215,978 | $3,240,943 |
Worked out by Radif Partners · How we calculate · factors read on hud.gov · not a loan offer
The FHA counts a home for at most $1,249,125 in a HECM for case numbers assigned from January 1, 2026 to December 31, 2026. Mortgagee Letter 2025-22, dated December 11, 2025, set that limit at 150 % of Freddie Mac's national conforming loan limit of $832,750. It applies in every state and territory, Alaska, Hawaii, Guam and the Virgin Islands included, and to traditional HECMs, HECMs for Purchase and HECM refinances alike. It rose by $39,375 from the $1,209,750 of 2025. The 2027 limit is not published yet, expected in December 2026. Above the cap, more value adds nothing to the loan: a 73-year-old with a $1,400,000 home gets the same $495,903 of principal limit as one whose home is worth exactly $1,249,125, against $555,800 if the full value counted. The upfront premium also stops at $24,983.
Where the $1,249,125 comes from
The National Housing Act ties the HECM limit to the conforming loan limit of Freddie Mac, the ceiling on ordinary mortgages that Freddie Mac can buy. FHA publishes a new limit for each calendar year by Mortgagee Letter. For 2026, Mortgagee Letter 2025-22 sets the maximum claim amount at $1,249,125, which is 150 % of the $832,750 conforming limit. The figure is the same everywhere, including the four special exception areas, and the same for all three kinds of HECM: a traditional loan on the home you live in, a HECM for Purchase, and a refinance of an older HECM.
| Case numbers assigned in | HECM limit | Source |
|---|---|---|
| 2025 | $1,209,750 | Prior year limit |
| 2026 | $1,249,125 | Mortgagee Letter 2025-22, December 11, 2025 |
| 2027 | Not published yet, expected in December 2026 | 150% of the 2027 Freddie Mac national conforming loan limit, set by FHFA |
What counts is the date the FHA case number was assigned, not the closing date. A file opened in late 2026 keeps the 2026 limit through closing, and HUD's lenders page (HUD single family lender resources) posts the new letter when it comes out.
How the limit enters the calculation
The lender starts from the maximum claim amount: the lesser of the appraised value, the national limit and, on a purchase, the sales price. That amount is multiplied by HUD's factor to get the principal limit, and it also sets the upfront mortgage insurance premium of 2 % and the origination fee cap. Below $1,249,125, the limit plays no role. Above it, the value counted stops there.
| Home value | Maximum claim amount | Principal limit at 73 | Cash in year one | Principal limit as a share of value |
|---|---|---|---|---|
| $600,000 | $600,000 | $238,200 | $124,920 | 39.7 % |
| $900,000 | $900,000 | $357,300 | $190,380 | 39.7 % |
| $1,100,000 | $1,100,000 | $436,700 | $234,020 | 39.7 % |
| $1,249,125 | $1,249,125 | $495,903 | $266,559 | 39.7 % |
| $1,400,000 | $1,249,125 | $495,903 | $266,559 | 35.4 % |
| $2,000,000 | $1,249,125 | $495,903 | $266,559 | 24.8 % |
| $3,000,000 | $1,249,125 | $495,903 | $266,559 | 16.5 % |
The last column tells the story. Up to the limit, a 73-year-old can borrow 39.7 % of the home value at today's rate. At $1,400,000 that share drops to 35.4 %; at $3,000,000 it is 16.5 %. The most any 73-year-old can get from a HECM in 2026 at this rate is $495,903, whatever the house is worth.
Try a home above the cap
Cash you can use in the first 12 months
$266,559
| Factor at age 73, 6.625 % | 0.397 |
| Maximum claim amount | $1,249,125 |
| Principal limit (line 1) | $495,903 |
| Upfront MIP, 2 % (line 3) | $24,983 |
What the cap changes for an expensive home
Three costs stop growing with the home value. The upfront premium is 2 % of the maximum claim amount, so it never exceeds $24,983 in 2026, even on a home worth twice the limit. The origination fee reached its $6,000 cap long before, at a $400,000 home value. And the annual premium is charged on the balance, which the principal limit keeps in check.
The equity above the limit is not lost, only left out of the loan. The whole home still secures the HECM, and when the loan ends, the balance is repaid from the sale and the rest belongs to you or your heirs. Heirs who keep the home settle for the lesser of the balance and 95 % of the appraised value, the real value of the home rather than the capped one. On a home worth far more than the limit, the balance would have to grow for many years before it came close to that value.
Premiums on a capped loan
Upfront mortgage insurance
$24,983
| Maximum claim amount | $1,249,125 |
| Upfront rate | 2 % |
| Annual rate on the balance | 0.5 % |
| Annual MIP, first year | $1,648 |
The yearly change
The limit moves with the conforming limit, so it rises in years when the conforming limit rises. From 2025 to 2026 it went up by $39,375. For a borrower of 73 whose home is worth more than both limits, that adds $15,632 of principal limit at today's factor. The 2027 limit is not published yet; it is expected in December 2026. Rates can move by more than that in a few weeks: at 73, a quarter point on the expected rate changes the principal limit on a capped home by $13,740. The page for homes above the limit and the rates page cover both sides.
A higher limit and an existing HECM
The lender fixes the maximum claim amount at origination, so a higher limit reaches an existing borrower only through a HECM-to-HECM refinance. The premium on that refinance is reduced by a federal formula: the upfront premium due is capped at 3 % of the increase in the maximum claim amount, minus the upfront premium already paid on the old loan. Take a loan opened in 2025 at the $1,209,750 limit, with $24,195 of upfront premium paid. Refinanced in 2026 at $1,249,125, 3 % of the $39,375 increase is $1,181, less than the premium already paid, so no new upfront premium is due. The extra room from the higher limit alone, $15,632 at 73, would still have to carry an origination fee of up to $6,000 and third-party costs, and the lender must show you that comparison in writing before you go ahead. The refinance page runs the full test.