- Who sends it
- Your reverse mortgage servicer, after notifying HUD, and in some cases only with HUD approval
- What it starts
- 30 days to tell the servicer how you will resolve the loan. Foreclosure generally must start within six months of the due date
- Do this first
- Call the servicer, say what you plan to do, and ask in writing for more time if you need it
What these letters are
This page covers the FHA-insured reverse mortgage, called a Home Equity Conversion Mortgage (HECM). Three letters matter most:
- Annual occupancy certification. Each year the servicer must get your statement, under penalty of perjury, that the home is still your principal residence. It may be done on paper, online or by phone. The servicer must also ask you to tell it when you will be away more than two months. If you have an eligible non-borrowing spouse, there is an extra yearly certification for them.
- Property charge delinquency letter. If you miss a property tax, insurance or similar payment, the servicer must send this letter within 30 days of learning about it. It must say what you did not pay, any amount the servicer advanced for you, and that if you do not pay within 30 days the loan will become due and payable. It must also tell you about housing counseling and options such as refinancing into a new HECM, state or local assistance programs, or selling or giving a deed in lieu.
- Due and payable letter. This says the whole loan must now be repaid. The loan becomes due when the last borrower dies and no surviving borrower lives there, or when a borrower transfers all title. With HUD's approval, it also becomes due when the home stops being a borrower's principal residence, a borrower is away more than 12 months in a row because of illness, property charges are not paid, or another loan duty is not met.
What it does and does not mean
- It is not a foreclosure yet, and it is not an eviction. Foreclosure comes later if the loan is not resolved.
- A HECM borrower has no personal liability for the loan. The lender can collect only through the home, and cannot get a deficiency judgment after a foreclosure. The same limit protects your estate.
- The usual mortgage help rules do not apply. Federal loss mitigation rules for regular mortgages (Regulation X §§ 1024.38 to 1024.41) exclude reverse mortgages. HUD's HECM rules set the steps instead.
- A property charge default can be fixed. You can cure it any time before foreclosure by paying all past-due property charges and repaying what the servicer advanced. Even after a foreclosure has started, a borrower may reinstate by correcting the problem, although the servicer may refuse if it accepted a reinstatement in the past two years or in a few other cases.
Deadlines and how to count them
- 30 days from the date of the due and payable notice to tell the servicer you will pay the loan in full, sell the home, give a deed in lieu of foreclosure, or (if the cause was not the last borrower's death) fix the problem.
- 30 days from a property charge delinquency letter to pay before the servicer asks HUD to call the loan due. If you have a set-aside (LESA) for taxes and insurance, you are in default only after it and your available funds are used up and you do not pay within 30 days of notice.
- Six months from the due date: the servicer generally must start foreclosure by then, unless HUD approves more time or state or bankruptcy law delays it.
- Up to two 90-day extensions to sell or pay off, if you or the person holding title shows the home is being actively marketed, a signed sale contract is delayed, or you are trying to pay off the loan. The servicer submits these to HUD.
- A deed in lieu must be accepted if it is recorded within 9 months of the due date and the servicer can get good title. HUD may pay a cash for keys incentive when the deed is given within 6 months.
What to do this week
If you are the borrower:
- Return every occupancy certification on time. Missing it can lead the servicer to ask HUD to call the loan due. If you will be away more than two months, for example in a hospital or rehab, tell the servicer in writing.
- If you got a property charge letter, pay the bill if you can, or call the servicer now about a repayment plan. HUD lets servicers offer a plan to repay advances over the shortest time needed, up to 5 years, generally sized at 25 percent of your monthly surplus income (what is left after living expenses and upcoming property charges).
- Ask about the At-Risk extension if the youngest borrower is at least 80 and you or a family member receiving care in the home has critical circumstances such as terminal illness or long-term disability. HUD decides whether to grant it.
- If the amount you owe in property charges is $5,000 or less, stay in contact and keep paying what you can. Servicers may hold off on calling the loan due in that case.
- Call a free HUD-approved housing counselor at (800) 569-4287, and ask your county about property tax relief for older homeowners.
If you are an heir or the estate: tell the servicer about the death (the servicer may accept a phone call to start the process), and ask for the loan payoff in writing. Because this is a reverse mortgage, the payoff statement is due within a reasonable time rather than 7 business days, so ask early. Then pick a path: pay off the loan, sell the home (HUD rules allow a sale for at least the lesser of the loan balance or 95 percent of the current appraised value), or give a deed in lieu. If you are selling, ask the servicer for an appraisal; it must order one within 30 days of your request. Keep proof of your marketing and offers so the servicer can ask HUD for extensions. If you want to keep the home and the balance is more than it is worth, ask the servicer in writing what amount it will accept from you, and talk to a counselor or lawyer first.
If you are a surviving spouse who was not a borrower: the loan may be deferred, meaning not due, while you live there, if you were married to the borrower at closing, were named as an eligible non-borrowing spouse in the loan papers, and keep meeting HUD's requirements, such as paying property charges. Within 30 days of learning of the death, the servicer must send you a notice about the deferral and its conditions. You must certify each year. Generally, the loan pays out no more money during the deferral. If the heirs' notice arrives and you were not named, still give the servicer your information, because the notice must ask about a spouse to check eligibility. A person who may have inherited the home can also send the servicer a written request asking what documents it needs to confirm them as a successor in interest.
State differences and scams
HUD's HECM rules are the same everywhere, but the foreclosure that follows uses your state's process. Examples from our state pages: in Texas, a lender on a reverse mortgage must get a court order before it can sell; in Minnesota, the redemption period after the sheriff's sale is 12 months, not 6, for a reverse mortgage; Rhode Island's required foreclosure mediation does not apply to reverse mortgages; and New Mexico's Home Loan Protection Act cure right does not cover them. Check your state page.
Families dealing with a death and a reverse mortgage are frequent targets. Watch for:
- Buyers who want the heirs to sign the home over fast for a small payment, before an appraisal or before you know the 95 percent rule.
- Anyone charging a fee up front to "get the loan forgiven" or to win more time. Only the servicer and HUD can grant extensions.
- Anyone who tells you to stop talking to your servicer, your housing counselor or your lawyer.
- Anyone who asks you to sign over your deed, or to send money anywhere other than to your servicer or the trustee or lawyer named in your foreclosure papers.
Read how to spot a foreclosure rescue scam. If there is money left after a foreclosure sale, see your state page for how to claim it yourself.
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
Do the heirs have to pay back more than the house is worth?
No. A HECM borrower has no personal liability for the loan, and the lender cannot get a deficiency judgment. When the loan is due, HUD's rules let the home be sold for the lesser of the loan balance or 95 percent of its current appraised value.
How long do heirs have after the due and payable letter?
The letter gives 30 days to tell the servicer your plan. Foreclosure generally must start within six months of the due date, and up to two 90-day extensions are possible if you show you are selling or paying off the loan. Stay in touch with the servicer in writing so those extensions can be requested.
I was in the hospital for months. Is my loan now due?
Not automatically. With HUD's approval, the loan can be called due if a borrower is away more than 12 months in a row because of illness and no other borrower lives there. Tell your servicer about any absence longer than two months and keep returning your occupancy certification.
Does this apply to a reverse mortgage that is not FHA-insured?
No. Proprietary reverse mortgages follow their own loan papers and state law. Read your loan documents and talk to a housing counselor or lawyer.
Keep reading
- Late notice and early intervention letterThis letter is a warning, not a foreclosure. Federal rules make your servicer reach out early and tell you about help. In most cases a foreclosure cannot start until you are more than 120 days behind, so this is the best time to act.
- Breach letter (demand or notice of intent to accelerate)A breach letter says you are in default and gives you a date to catch up. If you do not, the lender can call the whole loan due and move toward foreclosure. Many standard mortgages and deeds of trust require at least 30 days to cure.
- Notice of defaultIn many states that foreclose without a court, a recorded notice of default is the official start of the foreclosure. It is not a sale and not an eviction. It starts a waiting period before a sale can be set, and you can usually still catch up or apply for help.
- Notice of intent to forecloseMany states make the lender send a warning letter before it can start a foreclosure. These letters often give you a set number of days, a cure amount and a list of free counselors. The deadline in the letter matters, so act on it now.
- Lis pendens (notice of pendency)A lis pendens is a public notice, filed in the land records, that a lawsuit or foreclosure affecting your home is pending. It does not mean the home is sold or that you must move. It usually means the court papers are coming or have already been served.
- Foreclosure summons and complaintA summons and complaint means the lender has sued to foreclose. You have a short, firm deadline to respond in writing, often 20 to 30 days from the day you were served. Missing it can let the lender win without your side being heard.
Sources
- 24 C.F.R. § 206.27, HECM mortgage provisions (eCFR)
- 24 C.F.R. § 206.125, HECM due and payable procedures (eCFR)
- 24 C.F.R. § 206.55, deferral for an eligible non-borrowing spouse (eCFR)
- 24 C.F.R. § 206.59, servicer duties to a non-borrowing spouse (eCFR)
- HUD Handbook 4000.1, Update 18 (August 2026), FHA loss mitigation
- 12 C.F.R. § 1024.30, scope and successors in interest (eCFR)
- 12 C.F.R. § 1026.36(c), payment crediting, late fees and payoff statements (eCFR)
- 12 C.F.R. § 1024.36, requests for information (eCFR)
- HUD: Avoiding foreclosure
- CFPB: Find a housing counselor
- FTC: Mortgage relief scams