A Frequently Asked Reverse Mortgage Question

8/27/2008

posted by N. Sioris

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One of the questions that I have been asked time and time again from folks considering a reverse mortgage loan is: "What happens if I have a reverse mortgage and I am hospitalized or have to go to a nursing home before I die?"

This question is usually asked by someone who all ready understands that in order to have a reverse mortgage loan the home must be occupied as a primary residence. Consequently, the question about having to leave the home for health reasons, either temporarily or permanently, is an understandable question that comes up during the information gathering stage for many prospective reverse mortgage borrowers.

The requirements for paying off an FHA insured HECM reverse mortgage loan are that the reverse mortgage must be repaid when the last homeowner leaves the property for 12 consecutive months, the last surviving homeowner dies, or the home is sold.

Therefore, if the last homeowner is hospitalized or goes to a nursing home for less than 12 months, but is able to return to the home as their permanent residence within a years' time, the reverse mortgage loan does NOT have to be paid off.

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