Can my partner, family, or dependents live in my home if I have a reverse mortgage?

Most reverse mortgages today are Home Equity Conversion Mortgages (HECMs). The Federal Housing Administration (FHA), a part of the Department of Housing and Urban Development (HUD), insures HECMs. As long as you still live in the home, having a HECM does not change who can live with you. However, if you die or move out of the home, the HECM loan becomes due- which means you, your family members, or heirs will need to pay off the loan in order to keep the home.

If you are co-borrowing your HECM with a spouse (or anyone else), your co-borrower can stay in the home even if you die or move out of the home. If your spouse is not a co-borrower on the reverse mortgage, but was married to you at the time you took out the reverse mortgage, they may be able to remain in the home without paying the loan balance after you die or move into a health care facility, if they qualify under HUD’s rules. From the time you get a reverse mortgage, your non-borrowing spouse must continue to live in the house as their principal primary residence.”

Children, relatives, or other dependents who are not co-borrowers on the reverse mortgage, or spouses who do not qualify as an Eligible Non-Borrowing Spouse under HUD’s rules will have to pay off the HECM loan balance in order to remain in the home.

Most borrowers or their heirs will need to sell their home to repay the reverse mortgage. With an FHA-insured HECM loan, if the loan balance is more than your home is worth, you or your heirs won’t have to pay the excess. After you or your heirs sell the home, the lender will take the proceeds from the sale as payment on the loan, and the FHA insurance will cover any remaining loan balance.

If you or your heirs would like to keep your home instead of selling it, the loan must be paid off with another source of funds. But you or your heirs won’t have to pay more than the full loan balance or 95 percent of the home’s appraised value, whichever is less.

Get help

Before you apply for any reverse mortgage loan, you and your spouse or partner should seek a HUD-approved counselor to help you decide if a reverse mortgage is right for you. To talk to a HUD-approved reverse mortgage (HECM) counselor visit HUD’s counselor search page  , or call HUD’s housing counselor referral line at (800) 569-4287.