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HECM Terminology Exam 2025 Questions and Answers Principal Limit - --Answer --the maximum mortgage amount; equals the maximum claim amount times the principal limit factor. The maximum amount of money available from the loan at any given time, including the amount already borrowed, any set-asides, and any remaining available funds. Principal Limit Factor - --Answer --the percent of the maximum claim amount that equals the principal limit; determined by the age of the youngest borrower and the expected average mortgage interest rate Net Principal Limit - --Answer --the maximum mortgage amount minus financed loan costs and set asides (Principal limit (minus set-asides) minus loan balance = what the borrower can get) Maximum Claim Amount (MCA) - --Answer --whichever is less: the appraised value of the home, or HUD's national mortgage limit 203-b Limit (no longer used as of 11/2009) - --Answer --the maximum amount of home value that could be used to calculate the principal limit; varied by ....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 1