U.S. Department of Housing and Urban Development (HUD)
FHA reverse mortgages (HECMs) that come due when the borrower dies
FHA Resource Center
HUD Housing Counseling (HECM)
HECM Loan Servicer (contact directly)
Mortgagee notifies HUD within 60 days of the last surviving borrower's death; heirs have 30 days from the due-and-payable notice to respond; the mortgagee must commence foreclosure within 6 months of the due date, or later if HUD (the Commissioner) approves additional time (24 CFR 206.125)
The U.S. Department of Housing and Urban Development oversees FHA-insured reverse mortgages (Home Equity Conversion Mortgages, or HECMs). When a HECM borrower dies, the loan becomes due and payable. Heirs have options to repay the loan and keep the home, sell the property, or execute a deed in lieu of foreclosure. Non-borrowing spouses may qualify for a deferral period.
Notifying the HUD when someone dies
When a HECM borrower dies, the executor or heirs must notify the loan servicer so the loan can be called due and payable. The servicer is required to notify HUD/FHA within 60 days. Heirs then receive a due-and-payable notice from the servicer with a 30-day initial window to choose how to proceed. Heirs should contact the loan servicer directly — HUD does not interact with heirs in most cases. FHA should be notified as soon as possible when all borrowers on a HECM have died.
Timeline: 30 days from the due-and-payable notice to respond; the mortgagee must commence foreclosure within 6 months of the due date, or later if HUD (the Commissioner) approves additional time (24 CFR 206.125)
- •Contact the reverse mortgage servicer listed on monthly statements
- •The servicer reports the death to HUD within 60 days
- •The loan becomes due and payable upon the last surviving borrower's death
- •Option 1: Repay the loan balance and keep the home (pay in cash or refinance into a new mortgage)
- •Option 2: Sell the home (if underwater, sell for at least 95% of appraised value — FHA covers the shortfall)
- •Option 3: Execute a deed in lieu of foreclosure (transfer the property to the lender)
- •Contact the servicer to determine eligibility for a deferral period under 24 CFR 206.55
- •Must have been married to the borrower for the entire duration of the borrower's lifetime
- •Must occupy the property as principal residence
- •Must continue to pay property taxes, homeowner's insurance, and maintain the property
- •Must complete annual NBS certifications
Required Documents
- Certified copy of the death certificate
- HECM loan account number and servicer contact information
- Letters testamentary or letters of administration (proof of authority to act for the estate)
- Property appraisal (ordered by the servicer)
- Marriage certificate (for non-borrowing spouse deferral claims)
- Annual NBS certification forms (for non-borrowing spouses during the deferral period)
Timeline
Mortgagee notifies HUD within 60 days of the last surviving borrower's death; heirs have 30 days from the due-and-payable notice to respond; the mortgagee must commence foreclosure within 6 months of the due date, or later if HUD (the Commissioner) approves additional time (24 CFR 206.125)
Survivor benefits
Non-Recourse Protection for Heirs
HECM reverse mortgages are non-recourse loans — the property is the only collateral. Heirs are never personally liable for any shortfall if the loan balance exceeds the home's value. If the home is underwater, heirs can sell for at least 95% of the current appraised value, and FHA insurance covers the remaining balance.
Eligibility: All heirs of a deceased HECM borrower
How to apply: Contact the loan servicer to discuss options; the servicer orders an appraisal
Learn more →Non-Borrowing Spouse Deferral Period
An eligible non-borrowing spouse (NBS) can remain in the home after the HECM borrower dies without the loan being called due and payable. The NBS must have been married to the borrower for the entire duration of the borrower's lifetime, must occupy the property as their principal residence, and must continue to pay property taxes, homeowner's insurance, and maintain the property.
Eligibility: Surviving spouse who was continuously married to the borrower, occupies the home as principal residence, and meets ongoing obligations (24 CFR 206.55)
How to apply: Contact the loan servicer; the servicer determines NBS eligibility and processes the deferral
Learn more →HUD-Approved Housing Counseling
Heirs of a deceased HECM borrower can access HUD-approved housing counselors for guidance on their options. Counselors are trained in reverse mortgage heir procedures, including repaying the loan, selling the home, and non-borrowing spouse protections.
Eligibility: Heirs and family members of a deceased HECM borrower
How to apply: Find a HUD-approved HECM counselor at (800) 569-4287 or search online at hud.gov/findacounselor
Learn more →Frequently asked questions
The reverse mortgage (HECM) becomes due and payable when the last surviving borrower dies. Heirs receive a due-and-payable notice from the loan servicer and have 30 days to choose an option: repay the loan and keep the home, sell the property, or execute a deed in lieu of foreclosure. The servicer may grant 90-day extensions when heirs are actively marketing the property or arranging financing, and the mortgagee must otherwise commence foreclosure within 6 months of the due date (24 CFR 206.125), which HUD can extend.
An eligible non-borrowing spouse can remain in the home through a deferral period under 24 CFR 206.55. Eligibility requires continuous marriage to the borrower through death, occupying the home as a principal residence, and maintaining property taxes, insurance, and upkeep. This protection applies to all HECMs regardless of when the loan was originated.
No. HECM reverse mortgages cannot be assumed by heirs. The loan is personal to the original borrower(s) and terminates at death. Heirs who wish to keep the home must pay off the HECM in full (cash or new financing). This is different from traditional FHA forward mortgages, which have separate assumption rules.
HUD-approved HECM counselors provide free guidance on heir options after a borrower's death. Find a counselor by calling (800) 569-4287 or searching online at hud.gov/findacounselor.
Yes. When all borrowers on a HECM have died, FHA should be notified as soon as possible. The loan servicer is responsible for reporting the death to HUD within 60 days. Heirs should contact the loan servicer directly; the servicer handles FHA notification.
Yes. Heirs can keep the home by repaying the full HECM loan balance. They can pay in cash or refinance into a new mortgage in their own name. An appraisal is ordered to determine the current market value.
HECM loans are non-recourse — heirs are never personally liable for any shortfall. If the home is underwater, heirs can sell for at least 95% of the current appraised value. FHA insurance covers the remaining balance through the Mutual Mortgage Insurance Fund. Alternatively, heirs can walk away via deed in lieu of foreclosure.
Heirs have 30 days from the due-and-payable notice to choose an option. The servicer may approve 90-day extensions with documented evidence that heirs are actively marketing or selling the property or arranging financing. Under 24 CFR 206.125, the mortgagee must commence foreclosure within 6 months of the due date unless HUD (the Commissioner) approves additional time. A deed in lieu of foreclosure filed for recording within 9 months of the due date is accepted.
A deed in lieu of foreclosure allows heirs to transfer the property to the lender to satisfy the HECM debt without going through formal foreclosure proceedings. This avoids a foreclosure record on the estate. Heirs are not responsible for any remaining loan balance after the transfer.
Sources
Data sourced from U.S. Department of Housing and Urban Development primary sources (11 pages reviewed). How we research.
FHA Resource Center
HUD Housing Counseling (HECM)
HECM Loan Servicer (contact directly)
Mortgagee notifies HUD within 60 days of the last surviving borrower's death; heirs have 30 days from the due-and-payable notice to respond; the mortgagee must commence foreclosure within 6 months of the due date, or later if HUD (the Commissioner) approves additional time (24 CFR 206.125)