Can a HECM borrower's estate or heirs sell the property if the last surviving borrower dies?

If the Home Equity Conversion Mortgage (HECM)  is due and payable by reason of the last surviving borrower’s death, the borrower’s estate and/or the borrower’s heir(s) have the ability to “sell” the property for at least the lesser of the outstanding balance or 95% of the appraised value. 

For more information see Mortgagee Letter 2014-07 available at:

Any questions may be directed to the FHA Resource Center at Toll-Free Telephone Number (800) CALLFHA (225-5342) or by email to Persons with hearing or speech impairments may reach this number by calling the Federal Relay Service at (800) 877-8339.


All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: KA-03240