Non-Borrowing Spouses Are Now Protected With HUD Mortgagee Letter 2014-07
Effective April 2014, HUD announced new changes for non-borrowing spouses of
reverse mortgages. In other words, those who are either under 62 when their
spouse signed for a reverse mortgage, or who do not want to sign on the loan,
are able to continue to live in the home for as long as they would like,
provided they continue to meet the terms of the loan.
Prior to this change the loan would be due after the departure or
death of the last-named HECM borrower, or if the home is sold, or if the
borrower fails to pay taxes and insurance or otherwise comply with the loan
The non-borrowing spouse may then have to refinance the loan or sell the
home to pay back the loan. Many non-borrowing spouses preferred to stay in the
home they shared with their spouse, yet were unable to because of this rule.
This change brings welcome changes for non-borrowing spouses.
The Non-Borrowing Spouse Must:
- Establish legal ownership or right to remain in the home
- Continue to meet the obligations of the loan signed for by the original
borrowing spouse. This includes paying the property taxes and insurance, and
all other property charges that apply.