U.S. Department of Housing and Urban Development (HUD)

within 30 days of the date of the servicer's due-and-payable notice¹

within 30 days of the borrower's death²

within 30 days of the last surviving borrower's death³

within 60 days of the HECM becoming due and payable¹

within 30 days of notifying HUD^{1, 4}

within 6 months of the due date¹

within 9 months of the due date¹

within 60 days of the date the death information reached HUD's EIV system; the public housing agency files an End of Participation⁵

A HECM becomes due and payable when the last surviving borrower dies and the home is not the principal residence of another borrower.⁶

A HECM cannot be assumed: a "Borrower" is the original borrower and does not include successors or assigns. Heirs who want the home pay the HECM in full, in cash or with new financing, or sell it.¹¹

Heirs can keep the home by paying the outstanding balance plus accrued interest, mortgage insurance premium and servicer advances, in cash or by refinancing into a new mortgage in their own name.²

A deed in lieu of foreclosure transfers the home to the lender to satisfy the HECM without a foreclosure action; the servicer must accept one that can convey good and marketable title. The servicer then cancels the credit instrument and satisfies the mortgage, and nothing further is owed.¹

A non-borrowing spouse no longer has to establish marketable title or a legal right to remain within 90 days. Mortgagee Letter 2021-11 removed that requirement for all HECMs.^{12, 13}

For a HECM with an FHA case number assigned before August 4, 2014, no non-borrowing spouse was named at origination. Protection depends on the servicer electing a Mortgagee Optional Election Assignment, which it may take or decline.⁷

Inheritance by devise or descent, with or without a will, or a transfer to a relative resulting from the borrower's death does not let the lender call an FHA forward mortgage. An heir who has made the payments for at least six months before applying may assume it without credit review.^{7, 14, 15}

When the deceased was the only member of the household, assistance ends; in the voucher programs, housing assistance payments stop as of the last day of the month in which the death occurred.⁵

A live-in aide may never be made the new head of household and is not eligible for assistance after the head of household's death.⁵

The estate or heirs notify the loan servicer of the death; the servicer may accept verbal notification from the heirs or estate for due-and-payable purposes.⁷

FHA should be notified as soon as possible once all borrowers on a HECM have died, and the servicer handles that notification. Heirs deal with the servicer, not with HUD; HUD does not interact with heirs directly.¹⁶

The servicer can ask HUD for more time on behalf of an estate or heir actively marketing the property or working to satisfy the loan. HUD will consider no more than two 90-day extensions.^{7, 17}

Servicers must refer borrowers to a HUD-approved housing counseling agency before starting foreclosure.⁴

The public housing agency must request written confirmation of the death within 24 hours of learning of it, and may allow the family or emergency contact 30 days to respond.⁵

Takes the death report, sends the due-and-payable notice, and handles payoff, sale, deed in lieu and spouse deferral⁷

HUD's servicing contractor for HECM servicing, short sale and payoff inquiries¹⁶

Decides whether the remaining household keeps assistance and names the new head of household⁵

HUD participating housing counseling agencies, including counselors on FHA's HECM Counselor Roster, give free guidance on repaying the loan, selling the home, and non-borrowing spouse protections.¹⁸

Who qualifies: Heirs, non-borrowing spouses, and family members of a deceased HECM borrower