The annual occupancy certification is the servicer’s yearly check that the HECM property is still your principal residence. Mortgagee Letter 2023-23 requires the mortgagee to obtain that certification from the borrower and any Eligible Non-Borrowing Spouse. It may be on paper, electronic, or verbal. Jay Zayer, a CRMP who originates in California and Arizona, treats a missed certification as a servicing event that can look like a move-out even when you never left.
24 CFR 206.39 required occupancy at closing. 24 CFR 206.27 keeps occupancy as a due-and-payable trigger after closing. The annual letter is how HUD wants servicers to prove the rule is still true.
What are you certifying, and how often?
You certify that the property remains your principal residence as 24 CFR 206.3 defines that term: the permanent place of abode where you typically spend the majority of the calendar year. You may have only one principal residence at a time. A second home in another state does not get to share the title.
Frequency is annual, not “whenever the servicer feels like it.” If you identified an Eligible Non-Borrowing Spouse at origination, Mortgagee Letter 2023-23 also requires an annual certification that the spouse still meets Qualifying Attributes under 24 CFR 206.55.
California and Arizona do not run a separate state occupancy form that replaces the federal certification. A California driver’s license that still lists the HECM address helps. It does not replace the servicer’s process.
Failing to return the certification is one of the events Mortgagee Letter 2023-23 lists for an immediate due-and-payable submission to HUD, alongside no longer occupying and certain property-charge failures.
What if you miss the letter or are traveling?
Call the servicer and complete the certification late rather than ignoring the follow-up. A verbal certification is allowed. Keep a note of the date and the representative. Mail that sits unopened while you visit grandchildren is how “I still live there” becomes a default file.
Report absences longer than two months, as Mortgagee Letter 2023-23 instructs. That report is not a confession of default. It is how a documented trip stays a trip. See ongoing obligations for the property charges that continue while you travel.
If you have already moved to a child’s home and the HECM house is empty, certification will not save occupancy. 24 CFR 206.27(c)(2)(i) can make the loan due because the property ceased to be your principal residence.
How does a medical stay change the certification?
A temporary stay in a health-care institution that does not exceed twelve consecutive months still lets 24 CFR 206.3 treat the home as your principal residence. Tell the servicer the facility and the admission date when you certify. A health-care absence longer than twelve consecutive months, with no other borrower occupying, is the 24 CFR 206.27(c)(2)(ii) due-and-payable event.
Nursing-home stays are the longer version of this question. Do not use the annual form to hide a permanent facility move.
If the servicer has changed, complete the certification with the company named on the latest transfer letter (24 CFR 206.201 and 12 CFR 1024.33). Sending last year’s packet to the originator is how certifications “disappear.” See what the servicer does.
Who fails this form even though they still “kind of” live there?
Mortgagee Letter 2023-23 requires the mortgagee to obtain a certification that the property remains the principal residence of the borrower and of any Eligible Non-Borrowing Spouse. The certification may be hard copy, electronic, or verbal. A trip that is reported when it exceeds two months can still be a principal residence. A silent move to a child’s house cannot.
This form does not help a household that has already left and hopes a checked box will recreate occupancy. 24 CFR 206.27(c)(2)(i) can make the loan due because the property ceased to be the principal residence. It does not help someone who forwards mail and never updates the servicer address. The letter then sits in an empty house.
What can go wrong: a health-care stay is honest and documented, then it passes twelve consecutive months with no other borrower in the house. 24 CFR 206.27(c)(2)(ii) is that due-and-payable event. The annual form cannot hide it. See nursing-home stays.