Selling a Parent's House With a Reverse Mortgage in South Florida

Reverse mortgages are common among older homeowners in Miami-Dade, Broward and Palm Beach. When the last borrower passes away, the loan becomes due, and the family is suddenly on a clock. Here's how it generally works for the most common type, the FHA-insured Home Equity Conversion Mortgage (HECM).

According to HUD's guidance for heirs and the CFPB:

• After the last borrower's death, the servicer sends a due and payable notice.
• The heirs generally have 30 days to tell the servicer what they plan to do: pay off the loan, sell the house, or sign it over to the lender with a deed in lieu.
• The servicer may grant extensions, which can bring the total to roughly six months and sometimes longer, if the heirs show they're actively selling or arranging financing.
• Property taxes and insurance remain the estate's responsibility until the house is sold or transferred.

Call the servicer early, keep notes, and send what they ask for. A missed deadline can push the loan toward foreclosure. A surviving spouse who wasn't a borrower may have different rights, so check those first.

HECMs are non-recourse loans. If the loan balance is more than the house is worth, the heirs can generally sell for at least 95% of the current appraised value, and the lender accepts the net proceeds as payment in full. FHA insurance covers the rest. If the house is worth more than the balance, the heirs keep the difference after the loan and closing costs are paid.

That 95% figure is based on an appraisal the servicer orders. Older houses with deferred maintenance sometimes appraise lower than the family expects, and the appraisal sets the floor for what the servicer will accept.

The loan coming due doesn't by itself give anyone authority to sell. Someone usually needs to be appointed personal representative, unless the house was in a trust. See selling before probate and our inherited house page. If you live out of state, see selling an inherited South Florida house from out of state.

A traditional listing can take longer than the reverse mortgage timeline allows, especially when the house needs work. We buy houses with reverse mortgages as-is and work with the servicer's payoff and appraisal requirements through the title company. We have also bought inherited homes with other problems on top, like the Plantation house with open permits and code violations the heirs sold from out of state.

We buy across Miami-Dade, Broward, Palm Beach County and the Keys, including Miami Lakes, Hialeah, Pembroke Pines and Boca Raton. Call or text 305-812-9445, or tell us about the property. A HUD-approved housing counselor can also walk heirs through their options at no cost.