Even with the economy as down as it is, there is still always a bit of good news to hold on to. If you are 62 years and older, you might want to hear of the upcoming changes that the Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA) have cooked up for the reverse mortgage program. The changes include decreased equity limit, increased mortgage insurance premium (MIP), and an updated counseling session.

The reverse mortgage program, which is insured by the federal government, is designed to aid homeowners 62 years and above in converting their home equity into tax-free cash while also cancelling out monthly mortgage payments – payment will not be required until client moves out of the house. MIP paid on the loan will be used to cover the balance if it exceeds the home value. Payments can be retrieved as lump sum, line credit, or even monthly payment.

The nation’s third largest reverse mortgage lender, One Reverse Mortgage, revealed that by October 4, limit on equity that can be taken in reverse mortgage will decrease by 1 to 5% depending on the client’s age. Along with this, MIP, which serves as insurance that protects FHA when a home does not amount to reverse mortgage balance, will also increase from 0.5 to 1.25%.

“Anyone considering a reverse mortgage will really benefit by beginning the process soon. This is a fantastic opportunity for folks to get into a reverse mortgage without having to pay any additional fees, and under the current principle limits that will allow clients to leverage more of the equity from their home,” says One Reverse Mortgage CEO Jay Farner.

Though recent changes are not as grand as 2009’s, they are still something to be thankful for as they ensure stability for the program in the face of growing demand. As reiterated by HUD Deputy Assistant Secretary Vicky Bott, the changes ensure a sustainable reverse mortgage program.

An updated counseling program is also in the works for new clients who went into effect September 11. A counseling session with an independent, HUD-approved reverse mortgage counselor is required of every new client. In the session, loan disclosures will be reviewed and new tools will be used to review the client’s ability to meet financial obligations post-reverse mortgage.