Estate
Reverse mortgage after the borrower dies: what heirs can do
General information, not legal, tax or financial advice. Last reviewed Nov 1, 2026.
Step by step
- Tell the loan servicer about the death and ask for the due and payable notice, the payoff amount and the deadline in writing.
- Order death certificates. The servicer will need proof of death. See death certificates for estate matters.
- Work out who has legal title. The house may pass by will, by intestacy, through a trust or by a transfer on death deed. Someone may need to be appointed by the probate court first. See when you need probate.
- Ask for an appraisal. The lender has the home appraised once someone with a legal right asks in connection with a possible sale. Once the loan is due and payable, the lender pays for it and is reimbursed from any sale.
- Choose an option (table below) and tell the servicer in writing which one you’re pursuing.
- If you need more time, send proof that you’re actively marketing the house or arranging the payoff (listing agreement, offers, loan application) and ask the servicer to request an extension from HUD.
- Keep the house insured and maintained, and keep paying property taxes if you can, while the loan is open.
- Get free advice from a HUD-approved housing counselor if you’re unsure.
The options for heirsFederal law
| Option | What it means |
|---|---|
| Pay off the loan | Pay the full balance, including interest, mortgage insurance premiums and lender advances. Heirs often do this with their own mortgage and keep the house. |
| Sell the house | If the house is worth more than the loan, sell, repay the loan and keep the rest. If it’s worth less, the sale satisfies the loan if the price is at least the amount HUD sets, which can’t be more than 95% of the appraised value. Closing costs are capped. |
| Deed in lieu of foreclosure | Sign the house over to the lender instead of going through foreclosure. HUD may offer a “cash for keys” payment when the property is deeded back within 6 months of the due date. |
| Do nothing | The lender forecloses. Because a HECM is non-recourse, the lender can’t get a deficiency judgment against the borrower; it collects only from the sale of the house. |
- Heirs must repay the full balance to keep the home, or at least 95% of appraised value to sell when the balance exceeds the value; 30 days after the due and payable notice; time may be extended up to six months; mortgage insurance covers the rest. Source: CFPB – With a reverse mortgage loan, can my heirs keep or sell my home after I die?, checked Nov 1, 2026.
- Servicer notifies the estate or heirs within 30 days of notifying HUD (or receiving approval); 30 days to pay, sell for no less than the HUD-set amount (not more than 95% of appraised value), or give a deed in lieu; closing-cost cap; appraisal rules; foreclosure within six months of the due date unless HUD allows more time; cash for keys. Source: 24 CFR § 206.125, checked Nov 1, 2026.
- No personal liability for the loan balance; no deficiency judgment; loan is due when a borrower dies and the home is not the principal residence of a surviving borrower, subject to the non-borrowing spouse deferral. Source: 24 CFR § 206.27, checked Nov 1, 2026.
- Foreclosure must begin within 6 months of the last borrower’s death unless there’s a deferral period or HUD approves more time; servicer may request no more than two 90-day extensions when owners show active marketing or efforts to pay off the loan. Source: HUD Mortgagee Letter 2015-10, checked Nov 1, 2026.
- The 30-day due and payable notice to the estate or heirs now runs from the date the servicer notifies HUD of the death. Source: HUD Mortgagee Letter 2022-15, checked Nov 1, 2026.
If a spouse who wasn’t on the loan still lives thereFederal law
An eligible non-borrowing spouse may be able to stay. The loan’s due and payable status is deferred as long as the spouse keeps meeting the requirements, including continuing to live in the home as a principal residence, keeping up the loan obligations such as taxes and insurance, and, within 90 days of the borrower’s death, establishing legal ownership or another legal right to remain in the home for life. A non-borrowing spouse who wasn’t eligible when the loan was made doesn’t become eligible later. Older loans (case numbers issued before Aug. 4, 2014) follow separate HUD rules.
- Deferral period for eligible non-borrowing spouses; 90 days to establish legal ownership or a right to remain for life; ongoing requirements; ineligible spouses can’t later qualify; heirs’ right to dispose of the property is not affected. Source: 24 CFR § 206.55, checked Nov 1, 2026.
- Different notice rules for HECMs with case numbers issued before Aug. 4, 2014 with a surviving non-borrowing spouse. Source: HUD Mortgagee Letter 2022-15, checked Nov 1, 2026.
Free help
HUD-approved housing counseling agencies can explain the notice and your options. Find one through HUD’s counselor search.
State law: who owns the house nowState law
The reverse mortgage rules are federal, but who inherits the house and who can sign a sale is decided by state law: the will, intestacy rules, a trust or a transfer on death deed. See the probate rules for NH · CA · TX · FL · OH, selling a house during probate and inheriting a house with a regular mortgage.
Not yet verified: the dollar figure HUD currently uses for the closing-cost cap and any “cash for keys” amount. Ask the servicer for the current figures in writing. Reverse mortgages that aren’t HECMs (proprietary loans) follow their own loan documents, not these HUD rules.
Related: Inheriting a house with a mortgage · A sibling living in the house · Executor checklist
After a death: your state
New Hampshire · California · Texas · Florida · Ohio