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6 min read·February 5, 2024

Reverse Mortgage After a Spouse Dies: What You Need to Know

Losing a spouse is one of life's most difficult experiences. The last thing you want to worry about is losing your home. Understanding what happens to a reverse mortgage when a spouse dies — and the protections available — is essential knowledge for any couple considering this product.

Written by Miguel A. Vazquez

California Reverse Mortgage Specialist · NMLS #401212 · 20+ years experience

Licensed CA Broker

Quick Answer

What happens when one spouse dies depends on whether they were a co-borrower. If both spouses are on the loan, the surviving co-borrower keeps receiving funds and stays in the home with nothing due. If the survivor was a HUD-recognized Non-Borrowing Spouse, they can typically remain in the home under a deferral as long as they keep paying property taxes, insurance, and upkeep — though they cannot draw further funds.

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Instant answers pulled from our guides · not personalized advice

What You'll Learn

1What happens when both spouses are on the loan
2The Non-Borrowing Spouse protections introduced after 2014
3What a surviving spouse must do to stay protected
4The risk with older loans originated before August 2014
5How to protect both spouses from the start

If Both Spouses Are on the Loan

The simplest situation: if both spouses are listed as borrowers on the reverse mortgage, the surviving spouse continues the loan under the same terms. The loan does not become due when one spouse dies. The survivor can remain in the home for life, as long as they meet the ongoing requirements (taxes, insurance, primary residence).

Non-Borrowing Spouse Protections (Post-2015)

For loans originated after August 4, 2014, HUD introduced Non-Borrowing Spouse (NBS) protections. If one spouse is under 62 and cannot be on the loan as a borrower, they can be designated a Non-Borrowing Spouse. After the borrower dies, the NBS can remain in the home — the loan is not called due — as long as they continue living there, paying taxes and insurance, and the home remains their primary residence.

What the Surviving Spouse Must Do

After the borrowing spouse passes, the surviving spouse must notify the loan servicer promptly. They should be prepared to provide a death certificate, proof of continued occupancy, and evidence of ongoing tax and insurance payments. The servicer will convert the loan to the NBS deferral period and provide instructions.

Important Warning: Older Loans

For loans originated before August 4, 2014, NBS protections do not apply. The loan may become due immediately upon the borrower's death. If you have an older reverse mortgage and are a non-borrowing surviving spouse, contact us immediately to understand your options, which may include refinancing or negotiating a deferral with the servicer.

How to Protect Both Spouses From the Start

The best protection is to list both spouses on the loan from the beginning, even if one is under 62 (the NBS designation is the fallback, not the ideal). If the non-borrowing spouse is under 62, the loan amount will be calculated based on the younger spouse's age, resulting in lower proceeds — but both spouses will be protected.

Key Takeaways

✓If both spouses are borrowers, the survivor keeps the loan on the same terms and can stay for life.
✓A designated Non-Borrowing Spouse can remain in the home after the borrower dies (loans after Aug 2014).
✓The survivor must keep paying property taxes and insurance and notify the servicer promptly.
✓Loans originated before August 4, 2014 may not have Non-Borrowing Spouse protections.
✓Listing both spouses on the loan from the start is the strongest protection.

Frequently Asked Questions

Can a surviving spouse stay in the home after the borrower dies?

Answer

Yes, in most cases. If both are borrowers, the survivor remains. If only one was a borrower but the other is a designated Non-Borrowing Spouse (for loans after August 2014), the survivor may also remain under the NBS deferral period.

Does the surviving spouse need to make payments after the borrower dies?

Answer

No monthly payments are required. The NBS must continue paying property taxes, insurance, and HOA fees. The loan balance continues to accrue interest but no payments are due.

What if the surviving spouse wants to sell the home?

Answer

The survivor can sell at any time. The reverse mortgage balance is repaid from the sale proceeds, and the survivor keeps any remaining equity.

What happens if the surviving spouse doesn't meet the NBS requirements?

Answer

If the NBS fails to meet the requirements (taxes, insurance, primary residence), the loan can become due. It's critical to stay in contact with your loan servicer and meet all ongoing obligations.

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