What Happens to a Reverse Mortgage When You Die or Move?
A reverse mortgage comes due when the last borrower dies, sells the home or stops living there as a principal residence, which includes more than 12 months in a row in a care facility. It can also come due sooner if the property taxes, homeowners insurance or upkeep fall behind. If no co-borrower or eligible non-borrowing spouse lives there, heirs can keep the home or sell it, and on a HECM the most it takes to settle the loan either way is the balance or 95% of the appraised value, whichever is less.
Last updated October 22, 2026When the loan comes due
For a Home Equity Conversion Mortgage (HECM), the most common kind, the loan has to be repaid when the last surviving borrower or eligible non-borrowing spouse:
- dies,
- sells the home, or
- no longer lives there as a principal residence, meaning where they live most of the year.
It can also come due sooner if property taxes, homeowners insurance or HOA dues go unpaid or the home isn't kept in good repair. Until then, the balance keeps growing as interest and fees are added.
If you move into a care facility
Being away more than 12 consecutive months in a hospital, rehabilitation center, nursing home or assisted living facility counts as moving out. If a co-borrower lives in the home, they can stay and keep receiving loan payments as long as they meet the loan's terms. If nobody who lives there is a co-borrower or an eligible non-borrowing spouse, they'll have to move out unless they can pay back the loan.
If you die and a co-borrower survives
Nothing has to be repaid yet. A co-borrower stays in the home and keeps receiving payments while meeting the loan's terms. The CFPB suggests calling your servicer to confirm both names are on the loan and asking for that in writing.
If your spouse isn't a borrower
A non-borrowing spouse can stay by paying off the loan. They may also be able to stay without paying it off if they qualify as an Eligible Non-Borrowing Spouse. For loans with case numbers assigned on or after August 4, 2014, the spouse must have been married to the borrower when the loan documents were signed and stayed married until the borrower's death, be named in the loan documents as a non-borrowing spouse, have lived in the home at closing and keep living there as a principal residence, and keep the loan in good standing. An eligible non-borrowing spouse doesn't receive money from the loan. Older loans follow different rules, and the CFPB notes that qualifying can be difficult, so an attorney or a HUD-approved housing counselor can help.
What your heirs can do
When the loan becomes due and payable, heirs have 30 days from the lender's notice to buy the home, sell it or turn it over to the lender. That time can sometimes be extended up to six months so they can sell or arrange their own loan.
- Keep the home: on a HECM, pay the balance or 95% of the home's appraised value, whichever is less, often with a loan of their own. The servicer explains the steps.
- Sell for more than the balance: repay the loan from the sale and keep the difference.
- Sell when the balance is more than the home is worth: a sale for at least 95% of the appraised value repays the loan, and mortgage insurance covers the rest. Heirs don't pay the gap.
Proprietary reverse mortgages follow their own loan terms, so heirs should ask that servicer how the loan can be settled.
The CFPB suggests talking with your heirs now about their repayment options, and a HUD-approved housing counselor or an attorney can walk them through the process.
| Last borrower dies | Loan comes due; heirs have 30 days from the notice, sometimes up to six months |
|---|---|
| Co-borrower survives | Loan continues; they keep receiving payments |
| Eligible non-borrowing spouse | May stay; receives no loan money |
| More than 12 months in a care facility | Counts as moving out |
| Home worth less than the balance | On a HECM, heirs keep it by paying 95% of appraised value, or sell for at least that |
| Home worth more than the balance | Heirs keep the difference |
Related questions
Sources
- https://www.consumerfinance.gov/ask-cfpb/when-do-i-have-to-pay-back-a-reverse-mortgage-loan-en-236/
- https://www.consumerfinance.gov/ask-cfpb/what-happens-if-i-have-to-move-out-of-my-home-into-a-nursing-home-or-assisted-living-and-i-have-a-reverse-mortgage-en-243/
- https://www.consumerfinance.gov/ask-cfpb/what-happens-my-reverse-mortgage-when-i-die-en-2096/
- https://www.consumerfinance.gov/ask-cfpb/with-a-reverse-mortgage-loan-can-my-heirs-keep-or-sell-my-home-after-i-die-en-242/
- https://www.consumerfinance.gov/ask-cfpb/what-happens-if-my-reverse-mortgage-loan-balance-grows-larger-than-the-value-of-my-home-en-1217/
- https://www.hud.gov/hud-partners/single-family-hecmhome
- https://www.ecfr.gov/current/title-24/subtitle-B/chapter-II/subchapter-B/part-206
Sourced from licensed loan officers and brokers in the FreeRateUpdate network.
Educational information only, not individualized financial or legal advice. Program details and rates change; verify current terms with a licensed loan officer before making a decision.