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Inherited a Florida house that has a reverse mortgage on it? The loan comes due when the last borrower passes away, and the clock the lender works on is short. You have real options, and you never have to pay the loan out of your own pocket. Home Rescue Team buys inherited houses for cash across Miami-Dade, Broward, and Palm Beach — as-is, with no repairs and no cleanout. Call or text (305) 699-9763 and we will tell you honestly whether a cash sale fits your situation.
What happens to a reverse mortgage when the owner dies in Florida?
The loan becomes due and payable. On a federally insured reverse mortgage (a HECM), the servicer sends the estate and heirs a notice, and the heirs then choose: pay off the loan and keep the house, sell the house and keep whatever is left after the loan is paid, or hand the property to the lender with a deed in lieu of foreclosure. Heirs are not personally liable. If the loan balance is higher than the home’s value, the house can be sold for at least 95% of its appraised value and FHA mortgage insurance covers the rest. In Florida, the heirs usually also need probate authority before they can sign a deed.
The reverse mortgage timeline heirs are actually on
Most reverse mortgages in Florida are Home Equity Conversion Mortgages (HECMs), insured by the FHA and governed by federal rule 24 CFR 206.125. That rule sets the sequence:
- The servicer sends a “due and payable” notice. Once the loan is due because the last borrower has died, the servicer must notify the estate and heirs within 30 days of reporting the death to HUD.
- You have 30 days from that notice to respond with what you plan to do: pay the loan, sell the property, or give the lender a deed in lieu of foreclosure.
- The lender is required to start foreclosure within six months of the due date unless HUD approves additional time. Extra time is not automatic. HUD grants extensions (generally up to two 90-day periods) only when heirs show they are actively marketing the house or arranging payoff — a listing agreement or a signed purchase contract. Probate alone does not earn more time, so open it early so you can sign.
- You can ask for an appraisal. The servicer must have the property appraised by an FHA-roster appraiser, and that appraised value drives the minimum sale price described below.
Two practical points. First, interest and mortgage insurance keep adding to the balance every month until the loan is paid, so waiting costs the estate money when there is equity. Second, answer the servicer in writing and keep copies. Heirs who go silent are the ones who end up in foreclosure.
Not every reverse mortgage is a HECM. Proprietary (“jumbo”) reverse mortgages follow their own loan documents, not the HUD rule. The first thing to find out from the servicer is which kind you have.
Your three options as an heir
1. Keep the house
You pay off the reverse mortgage, usually with your own financing or savings, and the house is yours. Ask the servicer for a written payoff figure, and ask whether you can satisfy the loan for 95% of the appraised value if the balance is higher than the house is worth.
2. Sell the house
This is what most heirs do. The sale pays off the loan at closing and the heirs keep everything above the balance. If the house is worth less than the balance, HUD lets it be sold for at least 95% of the appraised value, and the lender releases the mortgage so that sale can close.
3. Deed in lieu of foreclosure
You sign the property over to the lender and walk away. You usually walk away with nothing, though some servicers offer a “Cash for Keys” payment for a prompt deed in lieu — ask. There is no foreclosure in the estate’s name either. This usually makes sense only when the house is underwater and nobody wants to deal with a sale.
You do not owe the difference
A HECM is a non-recourse loan. The lender can look only to the house for repayment, not to the heirs, and not to the rest of the estate. If the balance has grown past the home’s value, the FHA mortgage insurance the borrower paid for covers the shortfall. Nobody in the family should be paying a reverse mortgage out of personal funds, and no collector should be telling you otherwise.
When a cash sale makes sense — and when it does not
We would rather tell you this up front than waste your time.
- The house has equity (worth more than the balance). This is where a cash sale fits best. The six-month clock is running, the balance is growing, and the house is usually vacant, dated, and full of belongings. We buy as-is, close in about 15 days once you have authority to sell, the title company pays the reverse mortgage off at closing, and the heirs keep the rest.
- The house is underwater (balance higher than value). Here the heirs normally receive nothing from any sale, and the lender requires a price of at least 95% of the appraised value. A cash investor offer will often be below that number. If ours is, we will say so, and a deed in lieu or a listed sale at the 95% figure is probably the better path for you.
- The house needs major work. A fire, roof, or mold problem lowers the appraised value, which also lowers the 95% number. Houses that an ordinary buyer cannot finance are often where a cash purchase at the lender’s required price actually works. See selling a fire-damaged house.
Florida probate and the reverse mortgage clock run at the same time
The lender’s deadline does not wait for the court. In Florida, a house titled only in the deceased owner’s name generally cannot be sold until someone has legal authority to sign the deed, which usually means opening probate and having a personal representative appointed, or getting a court order on the property.
- Open probate early. Probate alone does not earn more time from HUD, but without it you cannot sign a contract — and a signed contract is what does earn an extension.
- Ask your attorney about summary administration. Smaller estates, and estates where the person passed more than two years ago, may qualify for Florida’s faster process.
- We can sign a contract before probate is finished and set the closing for the day you have authority. A signed contract also helps your extension request.
- Living in another state? You can do all of this remotely. See selling an inherited Florida house from out of state.
Home Rescue Team is a home buyer, not a law firm, and this page is general information, not legal advice. A Florida probate attorney should confirm what applies to your estate.
How selling to Home Rescue Team works with a reverse mortgage
- 1. Call or text us at (305) 699-9763. Tell us the address, roughly what is owed if you know it, and where you are with probate and the servicer.
- 2. We look at the numbers with you. Value, loan balance, and the 95% figure if it applies. If a cash sale does not help you, we tell you.
- 3. We make a written cash offer within 24 hours, as-is, contents included.
- 4. The title company orders the payoff from the servicer and works with your probate attorney on authority to sell.
- 5. You close. The reverse mortgage is paid from the proceeds and the remainder is wired to the estate or heirs.
Frequently asked questions
Do heirs have to pay a reverse mortgage out of their own money?
No. A federally insured reverse mortgage (HECM) is non-recourse. The debt is repaid from the house, and heirs are not personally liable for any balance above what the house brings. If the loan is larger than the home’s value, FHA mortgage insurance covers the difference.
How long do heirs have to sell a house with a reverse mortgage?
After the servicer sends its due and payable notice, heirs have 30 days to respond with a plan. Under 24 CFR 206.125 the lender must begin foreclosure within six months of the due date unless HUD approves more time. Additional time is not guaranteed and depends on showing you are actively selling: a listing agreement or a signed purchase contract.
What if the reverse mortgage balance is more than the house is worth?
The house can be sold for at least 95% of its appraised value, and the lender releases the mortgage so the sale can close. The heirs owe nothing further. The heirs also receive nothing from that sale, so a deed in lieu of foreclosure is sometimes the simpler choice.
Can the lender foreclose on an inherited house?
Yes. If the loan is not paid, the house is not sold, and no deed in lieu is given, the lender is required to start foreclosure. Florida is a judicial foreclosure state, so that means a lawsuit in the county where the house sits. Staying in written contact with the servicer and opening probate early are the best ways to avoid it.
Can we sell an inherited house with a reverse mortgage to a cash buyer?
Yes. When the house is worth more than the loan, a cash sale pays the reverse mortgage at closing and the heirs keep the rest. When the house is underwater, the price must meet the lender’s minimum of 95% of appraised value, and not every cash offer will. We tell you which case you are in before you sign anything.
Do we need probate to sell a Florida house with a reverse mortgage?
Usually, yes. If the house was titled only in the name of the person who passed away, someone needs court authority to sign the deed. The reverse mortgage deadline keeps running during probate, so it helps to open the case quickly and send the servicer proof that you did.
Inherited a Florida house with a reverse mortgage? Call or text (305) 699-9763 for a free, no-obligation review of your numbers and a cash offer within 24 hours. We also help with inherited houses, probate properties, and families where heirs disagree, across Miami-Dade, Broward, and Palm Beach.