What happens if I have a reverse mortgage and I have to move out of my home, such as moving into a nursing home or to live with family?
Reverse mortgage loans typically must be repaid either when you move out of the home or when you die. However, you may not need to immediately pay it back if you are away from your home for more than 12 consecutive months in a healthcare facility or have a co-borrower or Eligible Non-Borrowing Spouse living in the home.
If your spouse or person living with you is a co-borrower
If you move out of your home for any reason ─ such as to live in a nursing home, or downsize to a smaller house ─ and your spouse or the person living with you is a co-borrower on the reverse mortgage loan, they can stay in the home and continue to receive loan disbursements as long as they fulfill the ongoing obligations of the reverse mortgage.
If your spouse or person living with you isn’t a co-borrower
If your spouse or partner is not a co-borrower and you move someplace else for the majority of the year, the reverse mortgage loan will need to be paid back. The most common way to pay back a reverse mortgage is by selling the home, in which case your spouse or partner will have to move. If you are away from your home and in a healthcare facility such as a hospital, assisted living, nursing home, or rehabilitation center for more than 12 consecutive months, your non-borrowing spouse may be able to stay in the home without paying off the loan, depending on when you took out (“originated”) the loan. and whether they qualify as an Eligible Non-Borrowing Spouse under HUD’s rules. Qualifying as an “Eligible Non-Borrowing Spouse” can be difficult, so your spouse may want to consider contacting an attorney or HUD-approved housing counseling agency.
Learn more about whether your spouse can qualify as an Eligible Non-Borrowing Spouse.
Note: This information only applies to Home Equity Conversion Mortgages (HECMs), which are the most common type of reverse mortgage loan.