Can a HECM borrower sell the property whether or not the loan is due and payable?

Yes, the borrower keeps the ability to sell the property, whether or not the Home Equity Conversion Mortgage (HECM) is due and payable, for at least the lesser of the outstanding balance or the appraised value.  If the HECM is due and payable, the borrower maintains the ability to sell the property for at least the lesser of the outstanding balance or 95% of the appraised value, or present the Mortgagee with a deed-in-lieu.

For more information see Mortgagee Letter 14-07 at https://www.hud.gov/program_offices/administration/hudclips/letters/mortgagee

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-04124