The answer to this question depends on your specific situation. The Home Equity Conversion Mortgage (HECM), also known as a reverse mortgage, is federally regulated and insured by the Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA). HECMs make up the vast majority of reverse mortgages originated in the United States. A HECM allows you to tap into a portion of the equity you’ve built up in your home without having to make monthly mortgage payments.1 A HECM reverse mortgage comes due once the last surviving borrower passes away, sells the house, or permanently moves out of the home.
HUD defines a permanent move as living outside the home for one continuous year. For example, if a borrower is in a nursing home or assisted living for more than twelve consecutive months, this would be considered a permanent move. The loan also comes due if the borrower stops paying property taxes and homeowner’s insurance, or fails to maintain the home according to FHA guidelines.2
Below are some examples to help you determine when a borrower’s loan would become due.2
You are the only borrower on the HECM reverse mortgage and:
You are a co-borrower on the reverse mortgage and:
If you’re interested in learning more about a reverse mortgage and how it works, please use our Reverse Mortgage Calculator or call 800-218-1415.
1 You must live in the home as your primary residence, continue to pay required property taxes, homeowners insurance and maintain the home according to Federal Housing Administration requirements. Failure to meet these requirements can trigger a loan default that results in foreclosure.
2 Consumer Financial Protection Bureau, When Do I Have To Pay Back A Reverse Mortgage Loan? – consumerfinance.gov, 9/13/16, https://www.consumerfinance.gov/askcfpb/236/when-do-i-have-to-pay-back-a-reverse-mortgage-loan.html.