Will I Lose My Home If I Go To Assisted Living?

Not necessarily. One of the requirements for a reverse mortgage is to keep your home as your primary (or principal) residence. When you  move for medical reasons, such as going to a nursing home, you can keep  your home as long as you’re not away for more than 12 consecutive  months, according to Consumer Federal Protection Bureau (CFPB).  

If you can’t return to your home within this timeline, your reverse  mortgage loan will mature and be due and payable. In other words, you  will need to repay it.  Repayment of a reverse mortgage is most commonly  made through the sale of the home.

Possibly. According to the CFPB,  there are some circumstances where the reverse mortgage loan will not  become due and payable if you move to assisted living. For example, if  your spouse is a co-borrower on your reverse mortgage, they can stay in  the home and continue to receive the loan benefits. The stipulation is  that they continue to fulfill the ongoing obligations of the reverse  mortgage, which means keeping it as their primary residence, maintaining  the home, and staying current on property taxes.  

Recent policy guidance from HUD impacts the rights and responsibilities of a spouse who is not a co-borrower. Contact a HUD-approved housing counseling agency for help or clarification, or if you currently have a reverse mortgage, you can contact your loan servicer. 

Be sure to check the terms of your loan to ensure you are meeting  your obligations about notifying your lender of any changes. As a  reverse mortgage borrower, you are required to certify that the home is  your primary (or principal) residence each year. If your spouse remains  in the house as an eligible non-borrowing spouse, you will need to  certify that you are still married and that the home is your spouse’s  primary residence. 

In some cases, yes. The proceeds of a reverse mortgage can be used  for living and healthcare expenses, including assisted living. However,  the loan will mature and become due and payable unless your co-borrowing  spouse stays in the house. Although an eligible non-borrowing spouse  may remain in the home, they will not be able to access any further loan  proceeds once the loan matures. 

It’s important to understand the requirements of a reverse mortgage and how different life situations impact them. By taking the time to  review your options and obligations, you can make the best decision for  yourself and your family.