Line Number

Example #1

Example #2

Example #3

Example # 4

1

HECM National Mortgage Limit

$625,500

HECM National Mortgage Limit

$625,500

HECM National Mortgage Limit

$625,500

HECM National Mortgage Limit

$625,500

2

Appraised Value

$300,000

Appraised Value

$300,000

Appraised Value

$300,000

Appraised Value

$300,000

3

Sale Contract Price

$300,000

Sale Contract Price

$325,000

Sale Contract Price

$280,000

Sale Contract Price

$325,000

4

Earnest Deposit

$1,500

Earnest Deposit

$1,500

Earnest Deposit

$1,500

Earnest Deposit

$1,500

5

Maximum Claim Amount

$300,000

Maximum Claim Amount

$300,000

Maximum Claim Amount

$280,000

Maximum Claim Amount

$300,000

6

Initial Principal Limit*

$199,500

Initial Principal Limit*

$199,500

Initial Principal Limit*

$186,200

Initial Principal Limit*

$199,500

7

Initial MIP

$6,000

Initial MIP

$6,000

Initial MIP

$4,800

Initial MIP

$6,000

8

Loan Origination

$5,000

Loan Origination

$5,000

Loan Origination

$4,800

Loan Origination

$5,000

9

Other Loan Fees

$5,000

Other Loan Fees

$5,000

Other Loan Fees

$4,000

Other Loan Fees

$5,900

10

Service Fee Set Aside

$5,900

Service Fee Set Aside

$5,900

Service Fee Set Aside

$5,900

Service Fee Set Aside

$5,900

11

Principal Limit Applied towards purchase
(Line 1 or a lesser amount)

$199,500

Principal Limit Applied towards purchase
(Line 1 or a lesser amount)

$199,500

Principal Limit Applied towards purchase
(Line 1 or a lesser amount)

$186,200

Principal Limit Applied towards purchase
(Line 1 or a lesser amount)

$100,000

12

Total Closing Costs
(Lines 6+8+9+9+10)

$21,900

Total Closing Costs
(Lines 6+8+9+9+10)

$21,900

Total Closing Costs
(Lines 6+8+9+9+10)

$19,500

Total Closing Costs
(Lines 6+8+9+9+10)

$22,800

13

Monetary Investment **
(Lines 3+12-4-11)

$120,900

Monetary Investment **
(Lines 3+12-4-11)

$145,900

Monetary Investment **
(Lines 3+12-4-11)

$111,800

Monetary Investment **
(Lines 3+12-4-11)

$246,300

*The principal limit is the maximum amount available to the HECM mortgagor. Assumes the age of the youngest HECM mortgagor is 67 and a principal limit factor of .665 for a 5% expected average mortgage interest rate.
** The monetary investment is the monetary amount that the borrower must bring to closing to satisfy the difference between the HECM principal limit and the sale price of the property.

In Examples 1, 2, and 3, loan fees are deducted from the principal limit of the HECM. However, it is not required that loan fees be deducted from HECM proceeds. The mortgagor may pay loan fees as part of the required monetary investment and use all HECM proceeds for the home purchase.

In Example 4, the mortgagor opts to use a portion of the HECM proceeds towards the purchase of the home and retain a portion for future draws. Under these circumstances, the mortgagor is required to bring a larger required investment.