The 2026 reverse mortgage limit: what $1,249,125 really means

What the limit is

Every year, the Federal Housing Administration (FHA) sets a limit for HECMs, the federally insured reverse mortgage most people get. Its official name is the "maximum claim amount." For loans started in 2026, it's $1,249,125, and it's the same everywhere in the country.

That's up $39,375 from the 2025 limit of $1,209,750, an increase of about 3.3%. It's the tenth year in a row the limit has gone up.

What it is not

This is the part that confuses people. The limit is not the amount you can borrow. It's the highest home value FHA will use when it figures out how much you can borrow.

Here's how the math works, in plain terms:

• The lender starts with your home's appraised value or the limit, whichever is lower.
• A federal table then sets what share of that amount you can use. The biggest factors are the age of the youngest borrower (or eligible spouse) and current interest rates. Older borrowers can use a larger share. Higher interest rates mean a smaller share.
• Any mortgage you already have is paid off from that amount first. What's left is yours to use.

A quick example: A home worth $900,000 is under the limit, so the full $900,000 is used in the calculation. A home worth $1.6 million is counted as $1,249,125. The extra value isn't lost. It's still yours. It just isn't counted toward a HECM.

Who this year's increase actually affects

If your home is worth well under $1.2 million, the new limit probably won't change your numbers. Your age and interest rates matter far more.

The increase matters most if your home is worth more than the old limit. For those homes, a little more of the value now counts. If you want a rough idea of where you stand, try our reverse mortgage calculator.

What if your home is worth more?

For higher-value homes, which are common in much of California, there's another option: a proprietary reverse mortgage. These come from private lenders instead of being insured by FHA, and some allow loan amounts well above the HECM limit. Their rules, costs and minimum ages vary by lender and by state, so it's worth comparing one side by side with a HECM.

They're also far more common than they used to be. Private reverse mortgages made up 22% of all reverse mortgages made in 2025, more than triple their share two years earlier, according to the Mortgage Bankers Association. You can read how the different types compare on our Your Options page.

The limit caps one upfront cost, too

A HECM includes an upfront FHA mortgage insurance premium, figured as 2% of your home's value or the limit, whichever is lower. So for a home worth more than the limit, that cost is capped as well. It's one of the reasons homeowners with higher-value homes often compare a HECM with a private loan.

The 2027 number is coming soon

The HECM limit is tied to the national limit for conventional home loans. It's set at 150% of that figure. The conventional limit is usually announced in late November, and FHA typically follows with the new HECM limit in December. The new limit applies to loans whose FHA case number is assigned on or after January 1.

If your home's value is close to the limit, the timing of your application can matter a little. It's a fair question to ask a lender. We'll update this article when the 2027 limit is announced.