The usual federal rules do not apply
The federal application rules that protect other homeowners, including the 120-day rule, do not cover reverse mortgages. Your protections come from HUD's rules for the Home Equity Conversion Mortgage (HECM), the federally insured reverse mortgage, which are described here.
When a reverse mortgage becomes due
- The last borrower dies, and no eligible non-borrowing spouse is living in the home.
- A borrower transfers all of their title and no other borrower stays on title.
- The home stops being a borrower's main residence.
- A borrower is out of the home for more than 12 months in a row because of physical or mental illness, and no other borrower lives there.
- Property taxes or hazard or flood insurance are not paid.
- Another duty under the mortgage is not met.
For the last four, the servicer needs HUD's approval before it can call the loan due.
Behind on property taxes or insurance
- The servicer must send a letter within 30 days of learning of a missed tax or insurance bill. You then have 30 days to pay before it asks HUD to call the loan due.
- You can cure the default at any time before foreclosure by paying the property charges and repaying what the servicer advanced.
- Repayment plan: the servicer may offer a plan to repay its advances over as short a time as possible, and not longer than five years. It is generally sized at 25 percent of what is left of your monthly income after expenses.
- Small balances: the servicer may hold off calling the loan due when you owe $5,000 or less, are in contact, are willing to repay and are making payments.
- At-risk extension: if you cannot manage a repayment plan, the youngest living borrower is at least 80, and you or a family member cared for in the home has a critical condition such as a terminal illness or long-term disability, HUD can extend the time before foreclosure. HUD decides, and the extension ends if the conditions stop being met.
- If your loan has a set-aside for taxes and insurance, you are in default only after the set-aside and your available loan funds are used up and you do not pay within 30 days of notice.
After the loan is called due: the 30-day notice
The servicer must notify the borrower, the eligible non-borrowing spouse, or the estate or heirs. You then have 30 days to do one of these:
- Pay the balance in full.
- Sell the home for at least the amount HUD sets, which may not be more than 95 percent of the appraised value.
- Give the lender a deed in lieu of foreclosure.
- Fix the problem that made the loan due, when the cause is something other than the last borrower's death.
A borrower can fix the problem and reinstate the loan even after foreclosure has begun, with some exceptions. The servicer generally has to start the foreclosure within six months of the due date, so the time to act is short. See what a due and payable letter means.
A surviving spouse who is not on the loan
If you were married to the borrower when the loan closed, you are named in the loan documents as a non-borrowing spouse, and you still live in the home, the loan is not called due while you keep meeting the requirements. Tell the servicer in writing right away after your spouse dies, and ask what it needs from you.
Who to call
A HUD-approved housing counselor at (800) 569-4287, and legal aid or the senior legal services listed on your state's page. If the taxes are the problem, your state may also have a property tax deferral or relief program for older homeowners; see the property tax foreclosure page for your state from the state list.
How much time do you have? It depends on your state.
See the foreclosure timeline, deadlines and free local help for the state where the home is.
Common questions
Can heirs keep the house?
Yes, by paying the loan balance in full. Instead of that, they can sell the home for at least the amount HUD sets, which may not be more than 95 percent of the appraised value, or give a deed in lieu. See inherited homes.
Can I be foreclosed on while I am in a nursing home?
The loan can be called due, with HUD's approval, when a borrower has been out of the home for more than 12 consecutive months because of illness and no other borrower lives there. If you expect a long stay, talk to a HUD-approved counselor or an elder law attorney early.
Keep reading
- What to do firstThe earlier you act, the more options you have. These are the first six things to do, in order, whether you are about to miss a payment or are already a few months behind.
- A sale date is setA sale date means time is short, not that it has run out. Each option below has its own cutoff, so the order you act in matters. Start today.
- Avoid foreclosure rescue scamsPeople facing foreclosure are a target. Federal law bans most upfront fees for mortgage relief, so any company that asks to be paid before you have an offer from your servicer is breaking the rules.
- Your federal rightsFederal rules (Regulation X) set the floor in every state. They do not force your servicer to approve any option, but they control when it can start a foreclosure and how it must handle your application.
- Help by loan typeYour servicer collects the payments, but the rules for what it can offer you come from whoever owns or insures the loan. Find that out first.
- Taxes after foreclosureThe IRS treats a foreclosure as a sale, and forgiven debt is usually income. The main home exclusion many people relied on has expired for most 2026 cases, but insolvency and bankruptcy exclusions still apply.
Sources
- 12 C.F.R. § 1024.30, scope and successors in interest (eCFR)
- 24 C.F.R. § 206.27, HECM mortgage provisions (eCFR)
- 24 C.F.R. § 206.55, deferral for an eligible non-borrowing spouse (eCFR)
- 24 C.F.R. § 206.125, HECM due and payable procedures (eCFR)
- HUD Handbook 4000.1, Update 18 (August 2026), FHA loss mitigation
- HUD: Avoiding foreclosure