Borrowers want to sell:

  • The property is sold
  • HECM loan balance (principal plus accumulated interest and MIP) is repaid
  • Remaining equity goes to the existing borrower(s) or their heirs.

Borrowers want to sell and purchase a new home using a HECM for home purchase:

  • Combine a new reverse mortgage with the proceeds from the sale above to purchase a new home

One borrower passes away:

  • Nothing changes — the loan is not due and payable until the surviving borrower moves or passes away

Both borrowers pass away:

The heirs may pay the balance due on the reverse mortgage, refinance the property into their own name, or sell the home, for fair-market value, and use the proceeds to pay off the reverse mortgage. Any remaining equity after the reverse mortgage is repaid is theirs to keep.