Last reviewed: 7 October 2026
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What happens after a HECM becomes due and payable, explained
When a reverse mortgage comes due, the people responsible for the home face a short, defined sequence of notices and choices. This page sets out what HUD’s regulation and the CFPB say about that sequence.
What this term means: A HECM becomes due and payable when a trigger in the mortgage occurs, such as the death of a borrower where the property is not the principal residence of at least one surviving borrower (subject to the deferral for an Eligible Non-Borrowing Spouse), or the conveyance of all of a borrower’s title where no other borrower retains title.[5] This page is about what the regulation says happens after that point. Our guide to what a reverse mortgage is covers the triggers themselves.
The steps in HUD’s regulation
The rule is 24 CFR § 206.125. The table follows its order.[4]
| Step | What § 206.125 says |
|---|---|
| 1. Lender tells HUD | The mortgagee must notify HUD’s Commissioner within 60 days of the mortgage becoming due and payable under the § 206.27(c)(1) conditions or when a Deferral Period ends, and within 30 days when a § 206.27(c)(2) condition has occurred.[4][5] |
| 2. Lender notifies the borrower, spouse, estate or heirs | After notifying HUD and receiving approval where needed, the mortgagee must notify the borrower, Eligible Non-Borrowing Spouse, estate and heirs, as applicable, within 30 days of the later of notifying HUD or receiving approval that the mortgage is due and payable.[4] |
| 3. A 30-day window to act | The applicable party has 30 days from the date of the notice to do one of the following: pay the outstanding balance in full; sell the property for an amount not less than the amount HUD determines by notice, which cannot exceed 95 percent of the appraised value; give the mortgagee a deed in lieu of foreclosure; correct the condition that made the mortgage due (for reasons other than the death of the last surviving borrower); for an Eligible Non-Borrowing Spouse, correct the condition that ended the Deferral Period; or take other actions HUD permits by notice.[4] |
| Sale costs | Closing costs on a sale under this option cannot exceed the greater of 11 percent of the sales price or a fixed dollar amount HUD sets by Federal Register notice. “Sell” includes transfer of title by operation of law.[4] |
| Appraisal | The mortgagee must have the property appraised no later than 30 days after receiving a request in connection with a potential sale. The appraisal is at the requesting party’s expense unless the mortgage is due and payable; if it is, the mortgagee pays and may be reimbursed from sale proceeds.[4] |
| Reinstatement by a borrower | For a borrower, even after foreclosure begins, the mortgagee must permit correcting the condition and reinstating, with the mortgage insurance continuing. The mortgagee may require payment of its reinstatement costs and may refuse in three listed situations (a reinstatement accepted within the past two years, one that would preclude a later foreclosure, or one that would adversely affect lien priority).[4] |
| Foreclosure and deed in lieu | The mortgagee must start foreclosure within six months of the due date defined in § 206.129(d)(1), or within additional time HUD approves.[4] Section 206.129(d)(1) defines the due and payable date as the date the mortgagee notifies or should have notified HUD that the mortgage is due and payable, the date a Deferral Period ends, or the date HUD approved a due and payable request.[6] The mortgagee must accept a deed in lieu filed for recording within 9 months of the due date if it can obtain good and marketable title.[4] |
No personal liability for the balance
HUD’s regulation requires the mortgage to provide that the borrower has no personal liability for payment of the outstanding loan balance, that the mortgagee enforces the debt only through sale of the property, and that it may not obtain a deficiency judgment if the mortgage is foreclosed.[5] The CFPB says that when the loan balance is more than the home’s value, heirs “won’t have to pay more than 95 percent of the appraised value” and the mortgage insurance covers the rest.[3]
What the CFPB says in plain language
- If there is neither a coborrower nor an eligible nonborrowing spouse, the CFPB says heirs who want to keep the home must pay the full loan balance, and to sell it they must repay the full balance or, if the balance is more than the home’s value, at least 95 percent of its appraised value.[1]
- Once heirs receive a due and payable notice, the CFPB says they have 30 days to buy, sell or turn the home over to the lender, and that “it might be possible for the timeline to be extended up to six months.”[1]
- If the home is worth more than the balance when the loan is due, the CFPB says heirs can sell it, repay the loan and keep the difference.[1]
- The CFPB says a HECM must be paid off when the last surviving borrower or Eligible Non-Borrowing Spouse dies, sells the home, or no longer lives in it as a principal residence.[2]
How to verify this yourself
Read § 206.125 and § 206.27 in the eCFR (references 4, 5 and 6) and the three CFPB pages. The notice your servicer sends is the record of when your 30 days began. To check the person you are working with, use our guide to verifying a loan officer’s NMLS license. Our published standard covers how we check loan originators, and the Register shows that method; neither reviews a lender’s or servicer’s handling of your loan.
What this page does not cover
This page does not cover who qualifies as an Eligible Non-Borrowing Spouse (see our non-borrowing spouse guide), the property-tax and insurance default path, HUD’s claim-payment rules, or state probate and foreclosure law. HUD can change figures and procedures by notice, so confirm current terms with the servicer. The CFPB pages were last reviewed between July 2022 and August 2026. This page is general information, not legal advice, and it does not compare lenders, loan products or rates. It was last reviewed 7 October 2026.
Your next step
A written request to the servicer would show the date of the notice, the payoff figure and the options it offers. You can also consult a HUD-approved housing counselor (see how to find one) or an attorney. Then return to the Mortgage help library for related guides.