The higher lending limits signed into law help make the reverse mortgage even more attractive by increasing the amount that those with higher-valued homes can get from a reverse mortgage.  This has helped more seniors access more equity providing them with a bigger “rainy day” fund – a very important thing in these turbulent economic times!

That said, you would not qualify for enough at age 62 to pay off your existing $295,000 mortgage (on your $550,000 home) as required by the reverse mortgage.  Using the new limits, you would qualify for about $240,000 leaving a $55,000 shortfall.  You have a few options.  First, you can wait until you are older when you will qualify for more under a reverse mortgage.  Second, you can pay down your existing mortgage by $55,000 with other assets and then do a reverse mortgage.  Third, you can stay in touch with a reverse mortgage specialist to see if FHA makes any further adjustments to the program that might benefit you.