A short stay in a hospital or skilled-nursing facility does not, by itself, end a HECM. 24 CFR 206.3 still treats the home as your principal residence during a temporary health-care stay that does not exceed twelve consecutive months. If illness keeps you out longer than twelve consecutive months and no other borrower occupies, 24 CFR 206.27(c)(2)(ii) can make the loan due and payable. Jay Zayer, a Certified Reverse Mortgage Professional (CRMP) licensed in California and Arizona, treats a nursing-home move as an occupancy clock, not as an automatic foreclosure.
You still owe property charges while you are away. 24 CFR 206.205 does not pause because a facility is billing Medicare.
How long can a stay in a facility last before the HECM is due?
The twelve-month figure is a health-care rule, not a vacation allowance. 24 CFR 206.3 says the property remains your principal residence if you are temporarily in a health-care institution and that stay does not exceed twelve consecutive months. 24 CFR 206.27(c)(2)(ii) then lists a due-and-payable event if, for longer than twelve consecutive months, a borrower fails to occupy because of physical or mental illness and the property is not the principal residence of at least one other borrower.
Leaving for a child’s house, or converting the home to a rental while you sit in a facility, is a different default. That path is 24 CFR 206.27(c)(2)(i): the property ceases to be your principal residence. Renting the empty house does not buy more time. See renting with a reverse mortgage.
Mortgagee Letter 2023-23 requires annual occupancy certification and tells servicers to have borrowers report absences longer than two months. A family that waits in silence until month twelve has already missed the reporting rule even if HUD’s illness clock has not yet run.
California and Arizona licensing do not rewrite those federal occupancy sections. A longer Medi-Cal or AHCCCS stay still has to fit 24 CFR 206.3 and 206.27.
What if a spouse still lives in the house?
If that spouse is a co-borrower on the HECM, the home can remain a principal residence of a surviving borrower even while you are in a facility. The loan is not due solely because one borrower is receiving care.
If that spouse is only an Eligible Non-Borrowing Spouse, the Deferral Period in 24 CFR 206.55 is a death-of-borrower rule, not a nursing-home rule. While you are alive, occupancy still looks at whether a borrower maintains the home as a principal residence. A named Eligible Non-Borrowing Spouse who continues to live there is a fact the servicer must see. It is not a substitute for calling the servicer.
A daughter who moves in to “watch the house” is not a borrower. Her occupancy does not stop 24 CFR 206.27(c)(2)(ii) if you are the last borrower and you have been in a facility more than twelve consecutive months.
Picture an 83-year-old in Cottonwood, Arizona, who enters skilled nursing after a fall while a son in Flagstaff pays the insurance. The son’s checks do not restart occupancy. Documented medical absence and a living co-borrower would. An empty house with a relative’s mailing address would not.
What should the family tell the servicer first?
Call before the first missed occupancy certification. Give the facility name, the admission date, and whether return is expected. Ask whether the servicer treats the stay as a 24 CFR 206.3 health-care absence. Ask how property taxes and insurance will be paid if a LESA was not set at origination. A Life Expectancy Set-Aside cannot be added after closing. It is fixed at origination from the financial assessment.
If return is unlikely, plan the due-and-payable path early: sale, refinance by someone who will occupy, or the estate options in 24 CFR 206.125. For what heirs face after death rather than after a medical move, see the heirs timeline. For the spouse who was never on the note, see non-borrowing spouse.
Do not treat a reverse mortgage as a long-term-care policy. It can fund in-home help while you still occupy. It does not pay the facility bill as a HUD benefit. Model leftover proceeds before you assume a line of credit will cover both a vacant house and a nursing-home private-pay rate.
Who should not use a facility stay as a reason to originate?
24 CFR 206.3 can treat the home as a principal residence during a health-care stay that does not exceed twelve consecutive months. 24 CFR 206.27(c)(2)(ii) can make the loan due if illness keeps the last borrower out longer than twelve consecutive months. Those clocks are occupancy rules. They are not a facility-pay benefit.
This product does not help a household originating a HECM the week someone enters skilled nursing and will not return. MIP of 2.00% of claim amount (Mortgagee Letter 2017-12) is a poor fee for a house that will be empty. Sell, or have a remaining co-borrower or Eligible Non-Borrowing Spouse who still occupies. Jay will say that rather than fund a vacant-house file.
What can go wrong: the family pays the insurance from another city, skips the occupancy letter, and treats the son’s checks as occupancy. Checks are not 24 CFR 206.39. Call the servicer in the first week of admission. Give the facility name and the expected return date.