Ongoing obligations after getting a reverse mortgage are occupancy as a principal residence, property taxes, hazard insurance, flood insurance if mapped, and HOA dues if the project charges them. Jay Zayer, CRMP, is a reverse mortgage specialist at reversemortgage.coach. There is no required monthly P&I coupon. 24 CFR 206.205 still leaves property charges on you. 24 CFR 206.39 still requires occupancy. Missing those duties can make the loan due and payable.
Consider what happens when Reed, 65, occupies a house in Chandler, Arizona, and tells a relative “we don’t pay anything anymore.” That sentence is false. See borrower obligations for the late-charge sequence. Stay here for the definition: what the duties are, and what they are not.
A HECM remains FHA-insured. Ongoing duties are not a government tax holiday.
What ongoing obligations are actually on the HECM note?
Live in the house as your principal residence, with the health-care-facility rules in 24 CFR 206.3 if a medical stay happens. Pay taxes. Keep hazard insurance bindable under 24 CFR 206.27(b)(2). Keep flood coverage if 24 CFR 206.45(c) requires it. Pay the association. Complete occupancy certifications. Annual MIP of 0.50% of outstanding balance accrues on the loan. You do not write that as a coupon. It is added to the balance.
Reed’s unused line, if any, still grew from leftover principal limit after origination costs — leftover cash having sat in the mid-30s to low-50s percent of appraised value before those slices, depending on age and expected rate. I will not quote a live cell. The calculator was for origination. Obligations are for every year after. Do not interpolate HUD rows.
Mortgagee Letter 2017-12 already charged 2.00% initial MIP of claim amount at closing. 2026 files used the $1,249,125 cap in Mortgagee Letter 2025-22. Origination was capped at $6,000 under 24 CFR 206.31. Those were origination facts. The ongoing list is occupancy and property charges.
What is not an ongoing HECM obligation?
A monthly P&I coupon. A new LESA after closing. HUD counseling each year. A new FHA appraisal each year. California’s seven-day hold. Those were origination clocks. Chandler has no 1923.2(k) pause in any case. Do not import Encinitas into year three.
If a LESA was funded, it pays estimated taxes and hazard on its schedule. It does not pay HOA dues. It does not occupy the house. Jay confirmed it cannot be modified later. A tax increase is Reed’s problem, not a servicing redesign.
Counseling cost $125–$175 at origination. The certificate lasted 180 days. It does not renew as an annual duty.
What happens if an obligation is missed?
Servicing can pay a charge and demand reimbursement, or start a due-and-payable path, depending on the failure. Occupancy failures follow 24 CFR 206.27(c). Property-charge failures follow servicing rules under 24 CFR 206.205. I will not pretend a missed treasurer bill is “just a late fee” on every file. See the borrower-obligations page for the order servicing actually uses.
A second geography: a 77-year-old in Redlands whose California HOA will not wait. Same federal duties. Same occupancy certification. Different association demand.
An adjustable HECM still accrues at 1-month CMT plus lender margin while Reed occupies and pays charges. Reed’s expected rate already rounded to 0.125% under 24 CFR 206.3 at origination. My quoted average remains about 30 days on a complete refinance that reaches closing. After closing, duration is the rest of occupancy.
Heirs who later keep Reed’s Chandler house repay the outstanding loan balance under 24 CFR 206.125(a)(2)(i). Paying taxes on time does not rewrite that subsection into a family discount.
Who should not originate if the plan is to drop insurance after the wire?
This path does not help a household that wanted proceeds and a cancelled policy. Occupancy is still 24 CFR 206.39. I work with multiple lenders. I will originate when Reed understands the yearly list. I will turn away a no-insurance plan whose only thesis is that reverse mortgages “pay everything.”
If leftover cash after 2.00% of claim amount was decorative, the ongoing list is a reason you should have skipped the loan. Duties remain either way. The honest time to face them is before application, not after servicing boards the note.
Do HOA special assessments count as ongoing HECM obligations?
Yes, if the project charges them. 24 CFR 206.205 still leaves association charges on the borrower. A LESA does not pay them. Reed’s Chandler dues and a Redlands special assessment are both his job. Missing them can put the loan in trouble the same way a tax bill can.
I will originate when Reed understands dues. I will turn away a “HOA is optional after a reverse mortgage” plan.
Does a HECM require a new appraisal every year as an ongoing duty?
No. Reed does not re-appraise Chandler for HUD each January. Redlands files do not either. Occupancy certification is yearly. Hazard insurance is yearly. Taxes are yearly. The roster appraisal was origination. Mixing those is how households panic at a statement.
Pay the treasurer. Certify occupancy. Keep insurance bindable. That is the list. Reed still pays Chandler dues. Redlands special assessments still sit on the borrower. A HECM does not reprint an appraisal each January. Occupancy certification does. The missing coupon is not a missing duty list. HOA special assessments are still Reed’s job under 24 CFR 206.205. A LESA will not pay them. I will turn away a “dues are optional now” plan. Property charges stay on Reed.