Each year, the FHA updates the maximum claim amount for HECMs — often called the "HECM lending limit." In 2026, that limit has increased, which means homeowners with higher-value homes can access more equity through a reverse mortgage. Here's what changed and what it means for you.
The New 2026 Limit: $1,249,125
For 2026, the FHA HECM lending limit is $1,249,125. That's up from $1,209,750 in 2025. The maximum claim amount on your reverse mortgage is the lesser of your home's value or this limit. So if your home is worth $1.3 million, the amount used to calculate your principal limit is capped at $1,249,125 — and that cap is now higher than it was last year. For homes at or above the limit, the increase directly means more borrowing capacity. Our calculator uses the 2026 limit so you can see an estimate of what you might access.
Who Benefits Most
Homeowners with higher-value homes benefit most. If your home was at or near the 2025 cap, the 2026 increase gives you a larger base for the principal limit calculation — so your available proceeds (or line of credit) can be higher. In markets like many in Colorado, where home values have risen, more homeowners may find themselves in the range where the limit matters. Even if your home is below the limit, the higher cap reflects broader appreciation and keeps the program aligned with current housing values.
Historical Context of Limit Increases
FHA adjusts the HECM lending limit periodically, often in line with changes in national or regional home values. The limit has generally trended upward over time, which helps maintain the relevance of the program for retirees in higher-cost areas. The 2026 bump is part of that pattern — not a one-time exception but a reflection of how the program is designed to keep pace with the housing market.
How This Affects Proceeds Calculation
Your principal limit (the pool of funds you can draw from) is based on the maximum claim amount (min of home value and lending limit), your age, and the expected interest rate. So when the lending limit goes up, anyone with a home value at or above the new limit gets a higher maximum claim amount, which means a higher principal limit and thus more proceeds or a larger line of credit. For a detailed look at how proceeds are calculated and what costs are subtracted, see reverse mortgage costs explained and our homeowner guide.
Example: 2025 vs 2026
Suppose a homeowner is 75 with a home worth $1,250,000. In 2025, the max claim amount would be capped at $1,209,750. In 2026, it's capped at $1,249,125 — so the full $1,249,125 is used. That extra ~$40,000 in "countable" value increases the principal limit. Depending on the exact rate and age, that could mean several thousand dollars more in net proceeds or a larger line of credit. For someone with a $600,000 home, the limit doesn't bind (the home value is below the cap), so the 2026 change doesn't change their max claim amount — but the calculator and program still use the updated 2026 limit for consistency. You can plug in your own numbers in our calculator to see the impact.
Why This Matters for High-Value Homes in Colorado
In Colorado, especially along the Front Range, many homes are valued well into the range where the HECM limit applies. The 2026 increase means those homeowners can access more of their equity through a reverse mortgage — whether to pay off an existing mortgage, fund a line of credit, or receive monthly payments. If you're in a high-value home and have been waiting to see how much you could get, the new limit is good news. For more on reverse mortgages in Colorado, see is a reverse mortgage a good idea in Colorado.
Staying current on the HECM lending limit helps you understand your options. If you'd like to see how the 2026 limit affects your situation, use our reverse mortgage calculator, or contact me for a personalized walk-through of your numbers.
Have questions about reverse mortgages or want to see how much you might access? Try our calculator or schedule a conversation with Jerry.