Can a Surviving Spouse Stay in the Home After a Reverse Mortgage Borrower Passes Away?
One of the most important consumer protections built into today’s FHA-insured reverse mortgages is the protection for an eligible non-borrowing spouse.
If one spouse obtained the reverse mortgage but the other spouse was not a borrower on the loan, the surviving spouse may still be able to remain in the home after the borrowing spouse passes away or moves permanently into a healthcare facility. They do not have to immediately repay the loan or sell the home.
HUD refers to this protection as a deferral period, but a simpler way to think of it is the surviving spouse’s right to remain in the home as long as certain requirements are met.
To Keep This Protection in Place
The surviving spouse must:
- Have legal ownership or the legal right to remain in the home within 90 days after the borrowing spouse passes away.
- Continue paying property taxes, homeowner’s insurance, and any HOA dues when applicable.
- Continue living in the home as their primary residence. If they move into a healthcare facility, the absence generally cannot exceed 12 consecutive months.
- Understand that no additional reverse mortgage funds are available. During this time, the loan is frozen. No new monthly payments, line of credit advances, or other loan proceeds can be received.
When Does This Protection End?
The loan becomes due and payable when the surviving non-borrowing spouse:
- Permanently moves out of the home,
- Passes away, or
- No longer meets the occupancy or financial requirements described above.
This protection has helped many surviving spouses remain in their homes without the immediate stress of selling the property after losing a loved one. Like many reverse mortgage rules, however, eligibility requirements are very specific, so it is important to understand them before deciding whether a reverse mortgage is right for you.
Douglas Jones nmls 286668
Certified Reverse Mortgage Specialist
