**November 6, 2008 MORTGAGEE LETTER 2008-35**

**TO: ALL FHA APPROVED MORTGAGEES**

**ALL HUD-APPROVED HOUSING COUNSELING AGENCIES**

**SUBJECT: HECM Mortgage Limits - Effective Immediately**

The Housing and Economic Recovery Act of 2008 (HERA) established a
national mortgage limit for all Home Equity Conversion Mortgages (HECM),
insured under Section 255 of the National Housing Act, to be set in
conformance with section 305(a)(2) of the Federal Housing Home Loan
Mortgage Corporation Act (12 U.S.C. 1454(a)(2)). Effective for all HECMs
insured on or after the date of this Mortgagee Letter, the national
mortgage limit is **\$417,000**.

[Special Exceptions for Certain Areas of Hawaii]{.underline}

Section 214 of the National Housing Act permits mortgage limits for all
areas of Alaska, Guam, Hawaii and the Virgin Islands to exceed the
mortgage limit by up to 150%. The new HECM national mortgage limit of
\$417,000 effectively raises the mortgage limit in all of these areas
except 1) Hilo, Hawaii; 2) Honolulu, Hawaii; 3) Kappa, Hawaii; and 4)
Kahului-Wailuku, Hawaii. Enforcement of the new national mortgage limit
would effectively reduce the mortgage limits in these areas; therefore,
they will continue to operate under the current mortgage limits as shown
below.

  ------------------ --------- ------------- --------- ------- ------------
  MSA Name           MSA Code  County Name   County\   State   One-Family
                                             Code              

  HILO, HI (MICRO)   25900     HAWAII        001       HI      \$470,250

  HONOLULU, HI (MSA) 26180     HONOLULU      003       HI      \$544,185

  KAPAA, HI (MICRO)  28180     KAUAI         007       HI      \$544,185

  KAHULUI-WAILUKU,   27980     MAUI          009       HI      \$544,185
  HI (MICRO)                                                   
  ------------------ --------- ------------- --------- ------- ------------

The rates shown for these areas are based on current mortgage limits and
are subject to change upon publication of newly calculated mortgage
limits which will be published in a new mortgagee letter in the near
future.

[Re-calculation of loans]{.underline}

Lenders must use the national mortgage limit and calculate the loan
origination fee using limitations established by HERA, and new policy
guidance issued by FHA, when re-calculating HECM loans that did not
close prior to October 13, 2008.

[Maximum Claim Amount]{.underline}

In accordance with Section 255(g) of the National Housing Act, as
amended, the maximum claim amount cannot exceed the maximum loan limit
established under section 305(a)(2) of the Federal Home Loan Mortgage
Corporation Act for a 1-family residence. Thus, the maximum claim amount
will be the lesser of the appraised value or the national mortgage limit
for a one family residence. This applies to all one-to-four unit
properties. Neither the estimate of closing costs nor the initial
mortgage insurance premium is used in the calculation of the maximum
claim amount.

If you have any questions regarding this Mortgagee Letter, please call
1-800-CALL-FHA. Persons with hearing or speech impairments may access
this number via TDD/TTY by calling 1-877-TDD-2HUD (1-877-833-2483).

Sincerely,

Brian D. Montgomery

Assistant Secretary for Housing-

Federal Housing Commissioner