The HECM calculator uses the borrower's age, property value (or HUD lending limit, whichever is lower), current interest rates, and HUD guidelines to calculate the available proceeds and principal limit.  HUD has a table consisting of its Principal Limit Factors, which determines the loan-to-value ratio for each borrower's age based on the expected interest rate.  This ratio is then applied to the property value or lending limit to find the total loan amount, called the Principal Limit.