That’s true whether you’re the owner or an heir. With a HECM (the most common, FHA-insured kind), no one has to repay more than the home is worth.
Owner or heir?
These are HECM rules. Private reverse mortgages may differ.
If you’re the borrower
- You own the home, not the lender.
- There’s no prepayment penalty.
- The loan can come due if you move out for good, or if illness keeps you away over 12 months in a row, such as in a care facility. This doesn’t apply if another borrower lives there.
- Moving somewhere smaller? See downsizing help.
If you’re an heir
- The loan usually comes due when the last borrower dies.
- Heirs can sell, sign the home over to the lender, or keep it. Keeping it costs the loan balance or 95% of the appraised value, whichever is less.
- Settling an estate? See how probate sales work.
How the sale and payoff work
- Ask the servicer for a payoff statement.That’s the company that sends the loan statements. Heirs should call right away.
- Set the price.Alex prepares a comparative market analysis. If the loan is more than the home is worth, heirs can sell for at least 95% of the appraised value. Confirm the figure with the servicer.
- Close the sale.The title company or closing attorney pays off the servicer. You or the estate keep anything left after closing costs.
Selling an inherited house with a reverse mortgage
For a HECM, the lender can foreclose if these HUD deadlines pass.
- The “due and payable” letter generally gives you 30 days to pay off the loan, sell, or turn the home over to the lender.
- That time may be extended up to six months so you can sell, or get a loan and keep the home.
- The lender may approve 90-day extensions with proof you’re actively selling.
- The estate pays property taxes and insurance until title transfers.
Alex isn’t an attorney, CPA, or housing counselor. Ask a Florida probate attorney about the estate, a CPA about taxes, and the servicer or a HUD-approved counselor about the loan.
Keep these handy
- The servicer’s letter and payoff statement.
- The death certificate, and Letters of Administration or trust papers.
- The listing agreement, as proof you’re selling.
Alex Silva, broker
Voyance Real Estate is led by its broker and owner, Alex D. Silva, who has more than 30 years in real estate and holds Florida broker license BK3153327.
Short-sale negotiation is his specialty: lender approvals, second liens, and valuation disputes.
He works with homes, condos, rentals, and commercial property across Central and South Florida, in English, Spanish, and Portuguese.
Reverse mortgage sale questions
Can you sell a house with a reverse mortgage?
Yes. The sale pays off the loan at closing, and you keep what’s left.
What if the loan is more than the house is worth?
No one owes the difference on a HECM. After a sale at the appraised value, mortgage insurance covers the rest.
What if a spouse wasn’t on the loan?
They may be able to stay if the loan allows it and they meet HUD’s conditions. Some deadlines start at the borrower’s death, so call the servicer or a HUD-approved counselor right away.
Free help: CFPB on heirs · HUD fact sheet for heirs · Housing counselors · Florida Attorney General
General real estate information, not legal, tax, or financial advice.
Selling a home with a reverse mortgage?
Tell Alex whether you’re the owner or an heir, and what any servicer letter says.