When the last HECM borrower dies, the loan is due and payable under 24 CFR 206.27(c)(1) unless an Eligible Non-Borrowing Spouse starts a Deferral Period under 24 CFR 206.55. The servicer then follows 24 CFR 206.125. Heirs get a short, dated window to pay, sell, deed the home in lieu, or take another HUD-allowed step. Jay Zayer, a Certified Reverse Mortgage Professional (CRMP) licensed in California and Arizona, tells families to call the servicer before they argue about furniture, because the lien clock does not wait on family consensus.
There is no required monthly P&I for heirs to “keep current.” There is a due loan and a house.
What deadlines start when the last borrower dies?
The mortgagee notifies the Commissioner within 60 days of due-and-payable status when 24 CFR 206.27(c)(1) applies (24 CFR 206.125(a)(1)). After notifying HUD — and after HUD approval when needed — the mortgagee has 30 days to notify the estate and heirs that the mortgage is due and payable. Those parties then have 30 days from that notice to pay the outstanding balance in full, sell under 206.125(a)(2)(ii), provide a deed in lieu, correct a curable condition (not death), or take other actions the Commissioner permits by notice.
To keep the house, 24 CFR 206.125(a)(2)(i) requires payment of the outstanding loan balance, including accrued interest and MIP. To sell after due-and-payable status, the sale may close for not less than the Commissioner-set amount, which shall not exceed 95 percent of appraised value (24 CFR 206.125(a)(2)(ii)). Closing costs on that sale have their own HUD cap in that section.
An Eligible Non-Borrowing Spouse is on a different clock: 90 days from death to establish a legal right to remain (24 CFR 206.55(d)(1)). That is not the children’s sale clock. See non-borrowing spouse.
Consider a homeowner who is 85 in Kingman whose children live in three different states. The first job is to designate who talks to the servicer with authority — executor, successor trustee, or surviving spouse — not to list the house on a group text.
What choices do heirs have inside those windows?
Pay off and keep the home, usually with a new forward mortgage or cash. Sell and keep leftover equity after the HECM payoff. Deed in lieu under 24 CFR 206.125(f) if HUD’s recording window and title rules are met. If a sale is already in contract, ask the servicer in writing for the sale path and any extension HUD allows while the contract is alive.
Request an appraisal under 24 CFR 206.125(b) when a sale at the 95-percent path is on the table. If the mortgage is due and payable, that appraisal is at the mortgagee’s expense, reimbursable from sale proceeds.
California probate can take many months. Arizona probate has its own pace. Neither court cancels HUD’s servicing diligence. 24 CFR 206.125(d) generally requires foreclosure to start within six months of the due date in 24 CFR 206.129(d)(1), or within HUD-approved extra time, unless state or bankruptcy law blocks it. Communication is how families get the extra time that actually exists. Silence is how foreclosure starts on HUD’s calendar.
Effect on the estate is the leftover-equity math. This page is the calendar.
What happens if nobody answers the servicer?
The mortgagee proceeds toward foreclosure with the diligence 24 CFR 206.125(d) requires. Occupants who are not borrowers do not create a new HECM. A child living in the house without paying the debt is not a Deferral Period.
Non-recourse under 24 CFR 206.27(b)(8) still limits recovery to the property and FHA insurance after a proper liquidation. It does not pause foreclosure. It does not pay the HOA while the house sits.
Get a written payoff, the due-and-payable date, and the list of allowed actions. Do not mail a personal check for a guessed shortage. Do not rent the house to “buy time.” Occupancy rules on a due loan are a servicing conversation, not a landlord plan.
If the borrower is still alive and the issue is a facility stay instead of death, use nursing home. If you need the company name on the latest letter, use what the servicer does.
Cash-for-keys incentives under 24 CFR 206.125(f)(1)(ii) are a Commissioner option when a deed in lieu is delivered on HUD’s timeline. Do not count on a specific dollar amount. Ask the servicer whether any incentive is in force for this case number.
An appraisal ordered for the 95-percent sale path has an effective date rule in 24 CFR 206.125(b). A stale family appraisal from a refinance two years ago is not that appraisal. Order the one the regulation describes.
Heirs who want to keep the home and also keep a cheap existing second loan behind the HECM will usually find that the HECM payoff still has to happen first. Junior liens do not outrank FHA’s insured first. Title has to come out clean or the keep-the-house refinance fails.
What should the first thirty days after death actually contain?
24 CFR 206.125(a) requires the mortgagee to notify the borrower’s estate within 30 days after the mortgagee is notified of the death, and to give the estate a stated period to present a plan. That notice is the calendar, not a suggestion. Open it the week it arrives.
- Tell the servicer the date of death and who has authority: executor, administrator, or successor trustee.
- Request a written payoff, the due-and-payable date, and whether a HUD appraisal for the 95-percent sale path will be ordered.
- Decide, in writing among the heirs, whether someone will pay the balance and keep the house, sell, or convey.
- If a sale is the plan, do not wait for probate to finish before listing if state law and the personal representative allow a sale. HUD’s foreclosure diligence under 24 CFR 206.125(d) does not pause for family meetings.
- If an Eligible Non-Borrowing Spouse exists, stop using this heirs calendar and use non-borrowing spouse.
This timeline does not help a family that ignores the letter because “Mom said the house was free and clear.” It is not. Jay will say that to adult children before origination so the surprise is smaller. Silence is how 24 CFR 206.125(d) foreclosure starts on HUD’s clock.
What can go wrong: a child moves in to “watch the house,” pays no debt, and treats occupancy as a new HECM. Occupants who are not borrowers do not create a Deferral Period. Renting the house to buy time is worse. Call the servicer. Get the dates in writing.