What happens to a reverse mortgage if my parent moves into assisted living or a nursing home?

When does the loan come due?

On a HECM, the home has to stay the borrower's primary residence. The loan generally comes due if the last remaining borrower:

• Moves out permanently, or
• Lives away for more than 12 months in a row because of physical or mental illness (like a nursing home or assisted living).

Borrowers confirm they still live in the home each year with an occupancy certification from the servicer.

What if a spouse or co-borrower still lives there?

• A co-borrower on the loan can stay, and the loan continues.
• An eligible non-borrowing spouse may be able to stay under HECM protections, as long as the requirements are met.

What should the family do?

1. Tell the servicer about the move and respond to every letter.
2. Decide early: sell the home, refinance it, or pay it off. On a HECM, heirs or family can pay off the lesser of the balance or 95% of the appraised value.
3. Keep paying taxes and insurance and maintaining the home while it's being sold.
4. Use any remaining line of credit only with care and good advice.

Is it different for jumbo or second-lien reverse mortgages?

These aren't FHA-insured HECMs, so the time-away rules come from the loan documents. Check them early; I'll help you read them.

Example scenario (illustrative)

An 84-year-old in Lakewood moves into memory care. Her husband, a co-borrower, stays in the home, so the HECM continues with no change. Years later, after he moves in with their daughter, the family sells the home, pays off the loan, and keeps the remaining equity.

Our take

Planning for a move to care is part of a good reverse mortgage conversation from day one. Put both spouses on the loan when possible, and make sure your family knows who to call.