What will happen if I have a HECM loan and need to move in with my family or into a nursing home?

A Home Equity Conversion Mortgage (HECM or reverse mortgage) must be paid off when the last surviving borrower and if applicable an eligible non-borrowing spouse:

  • no longer live in the home for a majority of the year; or
  • moves out of the home for medical reasons for more than 12 consecutive months (including moving into a nursing home or assisted living).

In some cases borrowers may need to sell their home in order to repay the reverse mortgage.  With a HECM loan, if the loan balance is more than your home is worth, you are not required to pay the excess.   When you sell the home for its appraised value, the lender will accept the proceeds from the sale as full payment on the loan.

If you would like to keep your home instead of selling it, the loan must be paid in full using another source of funds.  However, you will not have to pay more than the full loan balance or 95 percent of the home’s appraised value, whichever is less.

It is very important that you talk with your loan servicer whenever you have a question about your reverse mortgage loan.

To locate a HUD-approved reverse mortgage (HECM) counselor, visit https://entp.hud.gov/idapp/html/hecm_agency_look.cfm, or call HUD's interactive voice system toll free at  (800) 569-4287.

For additional information see:

Mortgagee Letters 2014-07, 2015-02, 2015-10, 2015-15 and 2017-11 available 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-05290