Short answer
The CFPB says if you are away for more than 12 consecutive months in a healthcare facility and no co-borrower lives in the home, the home is no longer your principal residence and the loan must be repaid, often by selling. Shorter absences have notice rules. Tell your servicer early.
The absence rules
The CFPB guide for reverse mortgage borrowers has a table on time away. More than two months but less than six with no co-borrower in the home means you should notify your lender so it knows you still live there. More than six months away for non-medical reasons ends principal residence status. More than 12 consecutive months in a hospital, rehab center, nursing home or assisted living facility does the same.
What the 12-month rule triggers
When principal residence status ends, the guide says the loan must be paid back or satisfied through selling the property or a deed in lieu of foreclosure. Anyone living with you must move out unless they can pay the loan or qualify as an Eligible Non-Borrowing Spouse. A co-borrower in the home may continue to live there if they keep meeting the loan requirements.
Plan before the twelfth month
Families often wait until the deadline is near. Talk with the servicer about what documents it wants and when. Start the sale or the payoff plan with enough time to list, accept an offer and close. Ask about the payoff figure and about interest that keeps adding to the balance.
Medicaid and other benefits
If the owner may apply for Medicaid, selling and spending the proceeds raise separate issues. See an elder law attorney first. This page is general information and not legal advice. A HUD-approved counselor can help you review options.
Selling for cash instead
If a parent is moving into care, a house that needs no prep can be one less thing to manage. Kaizen Home Buyers buys houses for cash, as-is, with no repairs and no agent commission. We can make an offer within 24 hours and close in 14 to 30 days, or on the date you choose. Call 267-329-0084.