Your reverse mortgage loan becomes due when the last surviving borrower dies or no longer lives in the home for 12 continuous months or more, including due to a hospitalization or moving into a nursing home. Your heirs must pay off the loan if they want to keep the home.

Most reverse mortgages today are insured by the Federal Housing Administration (FHA), as part of its Home Equity Conversion Mortgage (HECM) program. With an FHA-insured HECM loan, if the loan balance is more than your home is worth, your heirs can satisfy the loan by paying 95 percent of the value of your home, and the FHA insurance will cover the remaining loan balance.

Proprietary (non-FHA insured) reverse mortgage loans may not have this feature, so make sure you understand the provisions carefully if you are considering a proprietary loan. Interest continues to be charged on the unpaid mortgage loan balance, so the mortgage loan should be repaid as soon as possible.

If your heirs cannot afford to pay off the loan, they will need to sell the home in order to repay the loan.