A reverse mortgage principal limit factor is HUD’s table lookup — youngest borrower age and expected rate — that converts maximum claim amount into a gross principal limit. Jay Zayer, CRMP, is a reverse mortgage specialist at reversemortgage.coach. Leftover cash is not that factor. Leftover cash is the factor times claim amount, minus liens, 2.00% initial MIP of claim amount, origination, third-party costs, and any LESA. I will not quote a live PLF percentage. Range language: leftover cash commonly lands in the mid-30s to low-50s percent of appraised value, depending on age and expected rate.
A common scenario: Rhys, 79, occupies a house in Newport Beach, California, and a golf partner recited a percentage as if it were a check. It was a factor, not leftover cash. See how HUD sets the factor for the table mechanics. Stay here for why leftover cash is the number that should change a decision. Run the leftover-cash worksheet.
A HECM remains FHA-insured. A HUD cell is not a public cash gift.
What number is this page actually solving for — factor or leftover cash?
Leftover cash. Gross principal limit = maximum claim amount × PLF. Claim amount is the lesser of appraised value and $1,249,125 for 2026 case numbers (Mortgagee Letter 2025-22). Then subtract the first mortgage, the HELOC, initial MIP of 2.00% of claim amount (Mortgagee Letter 2017-12), origination up to $6,000 under 24 CFR 206.31, about $3,000–$5,000 third-party, and any LESA. What remains is the number Rhys can actually use. The factor is only step one.
Do not interpolate HUD rows. Ages 70 and 71 are the same cell at 7.000% expected rate. Linear guesses between published ages are how websites overstate age 72. Counseling still costs $125–$175. Rhys still honors California’s seven-day Civil Code 1923.2(k) pause before a complete application.
Why is leftover cash not the principal limit, even when the house is paid off?
Because 2.00% initial MIP and costs still come out. On a $750,000 paid-off house the cost stack is about $15,000 + $6,000 + $4,000 = $25,000 before any LESA. A factor that looked “in the forties” on a cocktail napkin is not a 40% check. Annual MIP of 0.50% of outstanding balance starts after closing. It does not shrink the origination leftover. It grows the later balance.
A second geography: a 80-year-old in Lake Havasu City whose Arizona house carries a small first mortgage. Same HUD table. Different leftover cash after the payoff. Same leftover-cash gate.
If residual income requires a LESA, that set-aside is origination-only. Jay confirmed it cannot be modified after closing. A LESA can turn a pretty factor into thin leftover cash. Quote it.
A refinance uses a new factor on a new expected rate; I still mention ~30 days as my average close once that new file is complete. A refinance uses a new factor on a new expected rate, then pays off the old balance. The old factor does not travel.
How should you use a HUD cell without quoting a live percentage on this page?
Name age, claim amount, and expected-rate method: 10-year CMT plus lender margin, rounded to 0.125% under 24 CFR 206.3. An adjustable HECM still accrues later at 1-month CMT plus lender margin. This site’s published examples use 7.000% expected rate as of 22 September 2026. Your Loan Estimate uses your margin. Proprietary programs Jay closes — HomeSafe, Longbridge Platinum, Finance of America, Mutual of Omaha Secure Equity — do not use HUD PLF tables.
If Rhys’s heirs later keep the Newport Beach house, 24 CFR 206.125(a)(2)(i) still names the outstanding balance. The origination factor is not the keep price. See what a principal limit is.
What happens to leftover cash when value exceeds the 2026 cap?
Claim amount stops at $1,249,125 for 2026 case numbers (Mortgagee Letter 2025-22). The HUD factor still multiplies that cap, not the extra $400,000 of Newport Beach value above it. Rhys’s leftover cash can look small as a percent of a $1.6 million house even when the factor is doing its job. Proprietary programs Jay closes can use the extra value. They are not FHA-insured. Compare leftover cash, not pride in the full Zillow number.
Do not interpolate between published ages. Do not import a friend’s cell. Name expected rate as 10-year CMT plus margin, rounded to 0.125%. Then subtract liens and the $25,000-style stack on a $750,000 slice of claim amount. The factor is step one. Leftover cash is the decision number.
Who should not treat leftover cash as if it were the HUD factor printed on a hat?
This path does not help a household that wanted a friend’s percentage as a budget. Occupancy is still 24 CFR 206.39. I work with multiple lenders. I will originate when leftover cash after 2.00% of claim amount is useful. I will turn away a factor-as-check plan whose only thesis is a golf-course number.
If leftover cash after costs is decorative, the factor did its job by telling you the truth. Skipping the HECM is then the decision, not shopping a prettier unofficial cell.
Rhys’s Newport Beach value above the 2026 cap does not raise the HUD factor. It raises the case for a proprietary comparison. Leftover cash is still gross principal limit minus liens, 2.00% initial MIP, origination, third-party costs, and any LESA. A golf-course percentage is not that subtraction. I will not quote a live PLF percentage on this page. Leftover cash commonly lands in the mid-30s to low-50s percent of appraised value, depending on age and expected rate, after the stack. Run Rhys’s Newport Beach worksheet. Do not interpolate HUD rows.