A reverse mortgage on a home worth more than the FHA limit
When the house is worth more than $1,249,125: the share of its value a HECM can reach, the costs that stop growing, and why the extra value still matters to the heirs.
Cash you can use in the first 12 months
$272,555
Then $202,358 more after month 12, growing at 6.49 % a year while unused.
| Factor at age 74, 6.625 % | 0.405 |
| Maximum claim amount | $1,249,125 |
| Principal limit (line 1) | $505,896 |
| 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) | $303,537 |
| Net principal limit (line 25) | $474,913 |
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 | 75 | $33,054 | $506,669 |
| 2 | 76 | $35,264 | $540,547 |
| 3 | 77 | $37,622 | $576,691 |
| 5 | 79 | $42,822 | $656,392 |
| 10 | 84 | $59,185 | $907,218 |
| 15 | 89 | $81,802 | $1,253,894 |
| 20 | 94 | $113,061 | $1,733,044 |
| 25 | 99 | $156,265 | $2,395,291 |
| 30 | 104 | $215,978 | $3,310,604 |
Worked out by Radif Partners · How we calculate · factors read on hud.gov · not a loan offer
Above $1,249,125, a HECM treats the home as if it were worth exactly $1,249,125, the national maximum claim amount for 2026, so every dollar of value beyond it adds nothing to the loan. A $1,800,000 home at 74, with an expected rate of 6.65 % (10-year Treasury plus an example margin of 1.5 %), has a principal limit of $505,896, the same as a home at the limit: that is 28.1 % of its value, against 40.5 % for a home worth $1,249,125. The charges stop growing too: $24,982.50 of upfront mortgage insurance and a $6,000 fee, whatever the value. The part the FHA ignores still counts at the end, because heirs who keep the home settle for the lesser of the balance and 95 % of the appraised value then, not of the limit. Private lenders also sell proprietary reverse mortgages; they are not insured by the FHA and are not computed on this site.
The value the FHA counts
A HECM (Home Equity Conversion Mortgage, the FHA-insured reverse mortgage) is sized on the maximum claim amount (MCA): the lesser of the appraised value and the national limit, which is $1,249,125 for 2026 under Mortgagee Letter 2025-22. The definition sits in 24 CFR 206.3 and in HUD Handbook 4000.1. On a home appraised above the limit, the lender works with $1,249,125 from the first line of the payment plan. HUD's principal limit factor for the borrower's age and expected rate then applies to that number, not to the appraisal.
So the useful question is not how much the house is worth, but how much of its worth the loan can reach. The table holds the age at 74 and the rate at today's example, and moves the value.
| Appraised value | Counted (MCA) | Principal limit | Share of the value | Value not counted |
|---|---|---|---|---|
| $900,000 | $900,000 | $364,500 | 40.5 % | $0 |
| $1,249,125 | $1,249,125 | $505,896 | 40.5 % | $0 |
| $1,500,000 | $1,249,125 | $505,896 | 33.7 % | $250,875 |
| $1,800,000 | $1,249,125 | $505,896 | 28.1 % | $550,875 |
| $2,500,000 | $1,249,125 | $505,896 | 20.2 % | $1,250,875 |
| $3,500,000 | $1,249,125 | $505,896 | 14.5 % | $2,250,875 |
Up to the limit, the share is simply the factor, 40.5 % at 74. Past it, the principal limit freezes and the share falls as the value rises: 28.1 % at $1,800,000, 14.5 % at $3,500,000.
Charges that stop growing
Both upfront charges are tied to the MCA, so they freeze at the limit as well. The upfront mortgage insurance premium (MIP) is 2 % of $1,249,125, $24,982.50, and the origination fee is held at $6,000 by 24 CFR 206.31. On a $1,800,000 home they add up to 1.72 % of the value. Third-party costs such as the appraisal and title insurance come on top; only the lender’s cost estimate gives them.
Age still matters as much as below the limit. A 63-year-old with a $2,400,000 house gets a principal limit of $418,457 and $220,092 in the first 12 months, well under the 74-year-old's $272,555, although the house is worth more.
Try an age on a home above the limit
Cash you can use in the first 12 months
$236,580
| Factor at age 66, 6.625 % | 0.357 |
| Maximum claim amount | $1,249,125 |
| Principal limit (line 1) | $445,938 |
| Upfront MIP, 2 % (line 3) | $24,983 |
Our worked case: 74, a $1,800,000 home, no mortgage
The MCA is $1,249,125. At 74, HUD's factor is 0.405, so the principal limit is $505,896. The $24,982.50 premium and the $6,000 fee are financed. With no debt, the first-year limit is 60 % of the principal limit, $303,537, which leaves $272,555 of cash in the first 12 months and $202,358 more from month 13 on an adjustable loan. Taken as monthly payments for life instead, the net principal limit would give about $3,336 a month.
The cap applies at closing, not to growth. If the owner leaves the line of credit untouched, the unused part grows each month at the note rate plus 0.5 %. At 5.99 % held for ten years, the room to borrow at 84 would be about $907,218, against a balance near $59,185 made only of the financed charges and their interest. That is far more than the $272,555 of year one, yet still tied to a home counted at $1,249,125. Rates will move, so the figure gives a size, not a promise. The line of credit page has the method.
Heirs: 95 % of the real value, not of the limit
When the loan becomes due, the heirs can pay it off, sell, or hand over the deed. Under 24 CFR 206.125, the price a sale must reach to settle the loan cannot be set above 95 % of the appraised value at that time. That appraisal is the real one, with no cap. On a home above the limit, the gap between the two numbers works in the family's favor: the loan was sized on $1,249,125, while the protection is measured on the full value.
Take the worked case and suppose the owner draws the full $272,555 at closing and nothing after. With the note rate held at 5.99 % plus 0.5 % of annual MIP, the balance grows as below. The last two columns compare it with 95 % of a home still worth $1,800,000, and with 95 % of a home worth exactly $1,249,125.
| Years | Age | Loan balance | 95 % of $1,800,000 | 95 % of $1,249,125 |
|---|---|---|---|---|
| 10 | 84 | $579,842 | $1,710,000 | $1,186,669 |
| 15 | 89 | $801,417 | $1,710,000 | $1,186,669 |
| 20 | 94 | $1,107,663 | $1,710,000 | $1,186,669 |
| 25 | 99 | $1,530,934 | $1,710,000 | $1,186,669 |
After 25 years the balance would be $1,530,934. Heirs of the $1,800,000 home would repay the balance and keep about $269,066 of value; heirs of a home worth $1,249,125 could settle for $1,186,669, 95 % of its value, with FHA insurance covering the rest. The heirs page has the calculator for any balance.
Balance against 95 % of your value
Amount that settles the loan
$900,000
| Loan balance | $900,000 |
| 95 % of the appraised value | $1,995,000 |
| Equity left to heirs if sold at value | $1,200,000 |
Proprietary reverse mortgages are not on this site
Private lenders offer reverse mortgages outside the FHA program, and an owner above the limit may be shown one. They are not HECMs: they do not use HUD's factor table, the FHA premiums or the $1,249,125 cap, and the protections of 24 CFR part 206 do not govern them. Their amounts, rates and fees are set by each lender, and we have no official source to compute them, so this site gives no figure for them. Every number on this page is for the FHA-insured loan.