Selling a House With a Reverse Mortgage in Florida
Yes, you can sell a Florida home that has a reverse mortgage. Most reverse mortgages are FHA-insured Home Equity Conversion Mortgages (HECMs). The loan is paid off from the sale at closing, the same way a regular mortgage is, and you or the heirs keep whatever is left.
If the loan balance has grown larger than the home is worth, federal HECM rules limit what has to be repaid. This guide explains how that works for owners who want to sell and for families who inherit a house with a reverse mortgage.
Key takeaways
- You can sell a Florida home with a reverse mortgage; the loan is paid from the sale at closing.
- A HECM becomes due when the borrower sells, moves out permanently or the last borrower dies.
- After a death, HUD expects repayment within 30 days, with 90-day extensions possible while heirs actively sell.
- If the loan exceeds the home’s value, heirs can sell for at least 95% of the appraised value and owe nothing more.
- Keep property taxes and insurance paid until the house is sold.
When a reverse mortgage has to be repaid
A HECM borrower makes no monthly payments while living in the home. According to HUD, the loan balance becomes due and payable when the borrower sells the home, no longer lives in it as a primary residence, or after the last surviving borrower dies.
The balance is what was borrowed plus interest and fees, so it usually grows over time. Ask the loan servicer for a payoff statement early, because that number decides how much equity is left.
Selling while the borrower is alive
If the sale price is more than the loan balance, the title company pays the servicer at closing and the seller keeps the difference.
If the balance is more than the home is worth, the CFPB explains that a seller who sells at the appraised value can apply the proceeds to the loan, and the FHA mortgage insurance paid during the loan covers the rest. If the loan is already in default and the servicer has sent a “due and payable” notice, the CFPB says the home may be sold for 95 percent of the appraised value.
If you inherited a house with a reverse mortgage
HUD says the estate or heirs (other than an eligible non-borrowing spouse) can sell the home, pay off the loan, or give the property to the lender with a deed in lieu of foreclosure.
HUD’s guidance says the loan must be satisfied within 30 days of the borrower’s death, and the lender may approve 90-day extensions when the estate or heirs document that they are actively trying to sell or repay. The CFPB says the timeline may be extended up to six months so heirs can sell the home or get their own loan.
Until title is transferred, HUD says property taxes and insurance remain the estate’s responsibility. In Florida, falling behind on those can add to the problem, so keep them paid while the home is on the market.
The 95% rule: heirs do not owe more than the home is worth
A HECM is a non-recourse loan for heirs. HUD says that if the loan balance is more than the home is worth, the estate or heirs may sell the home for at least 95 percent of the current appraised value and the lender will accept the net proceeds as satisfaction of the loan. FHA mortgage insurance covers the shortfall.
Heirs who want to keep the house must pay off the loan balance in full, according to HUD, often by getting their own mortgage.
A surviving spouse who was not on the loan
Special rules may let an eligible non-borrowing spouse stay in the home and postpone repayment. HUD says that spouse must give the lender a Non-Borrowing Spouse Certification within 30 days of the last surviving borrower’s death, among other requirements. Contact the servicer right away if this applies to you.
How heirs sell a house with a reverse mortgage
- 1
Notify the servicer
Tell the reverse mortgage servicer about the death as soon as possible and ask what documents it needs and what deadlines apply.
- 2
Request a payoff and appraisal
Ask for the current loan balance. If the balance may be more than the home is worth, the servicer will order an appraisal to set the 95% figure.
- 3
Ask for an extension if needed
Send the servicer proof that you are actively selling, such as a listing agreement or a signed purchase contract, to request more time.
- 4
Sell and close
At closing, the title company pays the servicer from the sale proceeds. Any money left over goes to the estate or heirs.
Authoritative resources
These primary sources provide additional legal, tax, or closing context. This guide is general information, not legal, tax, or financial advice.
Questions homeowners ask
Quick answers to the most common questions on this topic.
Not for a HECM when the home sells for at least 95 percent of its appraised value. HUD says the lender accepts the net proceeds as satisfaction of the loan, and FHA mortgage insurance covers any shortfall.
HUD’s guidance says 30 days from the borrower’s death, with 90-day extensions the lender may approve while the heirs actively try to sell. The CFPB says the timeline may be extended up to six months. Keep the servicer informed in writing.
A HUD-approved housing counseling agency can review your options at no cost, and a Florida probate attorney can advise the estate. The FHA Resource Center can be reached at (800) 225-5342.
Yes. Florida Cash For Home buys houses with reverse mortgages, including inherited homes, as-is. The reverse mortgage is paid off through the title company at closing. Call (954) 637-2999.
