If the value of a reverse mortaged property decreases and the heirs want to purchase it, do they have to repay the entire balance?

In the case of a reverse mortgage, upon the death of the last borrower, the heirs have a couple of options... Keep the home by paying off the balance due to HUD, Sell the home and keep the excess proceeds after paying off the balance due to HUD or, in the event the balance exceeds the amount you can sell it for, give it back to HUD. In light of current trends, if you are upside down and selling is not an option, HUD may, in today's environment, consider allowing the equivalent of a short sale to an heir, but if there is any equity at all, I doubt they would. I have not heard of a situation where HUD allowed the heirs to buy the home at current market value. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ Licensed in California and Arizona ~ www.LoansA2z.com 888-889-9950

HUD does allow for the heirs to purchase the home at "Fair Market Value", which they have determined to be 95% of appraised value or greater... so if the property is worth less than what's owed, HUD will accept the net proceeds as payment in full, and the insurance will pay the deficit.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

they will have to purchase the loan balance if no one of the heirs is 62 yrs old... i do have a possible solution for you pleae email me at yourloanpartnerforlife@live.com lindad

No. They can pay fair market value.