Short answer
After the borrower dies, the reverse mortgage becomes due. Heirs have 30 days after the due and payable notice to buy, sell or turn the home over, and may get an extension of up to six months. If the house is worth more than the loan, you keep the difference. If less, 95 percent of appraised value may satisfy it.
The clock starts with a notice
The CFPB explains that once heirs receive a due and payable notice from the lender, they have 30 days to buy, sell or turn the home over to the lender to satisfy the debt. It might be possible to extend the timeline up to six months so heirs can sell the home or get their own loan to buy it.
Call the servicer promptly, ask in writing for the payoff and the available extensions, and save every letter.
Do not let the notice sit. A missed deadline can move the loan toward foreclosure, so read the notice for dates and for the name of the person to call.
If the house is worth more than the loan
Heirs can sell, repay the loan and keep what is left. The estate will need someone with legal authority to sell, usually a personal representative appointed through the county Register of Wills. Pennsylvania's Seller Disclosure Law exempts transfers by a fiduciary in the administration of a decedent's estate, so ask the estate attorney whether the disclosure form applies.
Heirs often need time to open the estate, find the deed and decide who will manage the sale. Start that work while you ask the servicer about an extension. A cash buyer who can close quickly may help if the clock is short, but a listing can still work if the servicer gives more time.
If the house is worth less
The CFPB says that if the loan balance is higher than the home's value, heirs can settle by paying at least 95 percent of the home's appraised value, with the mortgage insurance covering the remainder. That requires an appraisal and the servicer's process.
To keep the house, heirs must pay off the balance, which usually means their own financing.
Get help
The CFPB recommends contacting a HUD-approved housing counseling agency or an attorney for guidance on your timeline and options. An estate attorney can also tell you whether other debts or heirs affect the sale.
Reverse mortgage servicers have specific procedures. Ask them for the steps in writing so you can track the deadlines.
Ask the servicer whether any non-borrowing spouse or co-borrower may have different rights. The rules for surviving spouses can differ from those for other heirs, and the page we reviewed focused on heirs.
Where a cash sale fits
A reverse mortgage deadline makes timing the main concern. Kaizen Home Buyers buys as-is, makes a cash offer within 24 hours, charges no agent commission and typically closes in 14 to 30 days or on your date. If the house needs work or the clock is short, that may help. If it is in good shape and you have time, a listing may bring more. Call 267-329-0084.