You can sell a house with a reverse mortgage the same way you sell any house with a lien on it: the loan is paid off at closing from the sale proceeds, and whatever is left goes to the borrower or the estate. The part that trips families up is the clock. A Home Equity Conversion Mortgage (HECM) becomes due and payable when the last borrower dies, sells, or stops living in the home for 12 consecutive months, and a move to assisted living or a nursing home counts. From the servicer’s due-and-payable notice, you generally have six months to sell or settle, with extensions possible up to about a year. Here is how the timeline, the payoff math, and the sale fit together in Georgia. We are home buyers, not attorneys or loan servicers, so confirm the specifics of your parent’s loan with the servicer and, where the estate or a Medicaid plan is involved, with a Georgia elder law or probate attorney.
When does a reverse mortgage become due?
A HECM becomes due and payable when a maturity event happens: the last surviving borrower dies, the borrower sells or transfers title, or the borrower stops using the home as a principal residence for more than 12 consecutive months. That last one is the trap for families coordinating a senior care move. Mom moves into memory care in March “just to see how it goes,” the house sits, and the following March the servicer’s annual occupancy certification comes back showing nobody lives there. The loan is now due. Falling behind on property taxes or homeowners insurance can also put the loan in default, since the borrower agreed to keep those current. If your parent has already moved, or the move is being planned, the practical move is to treat the twelve-month mark as a deadline that is already running, and to read the full guide to selling a parent’s home for assisted living alongside this one.
What does the due-and-payable notice actually say?
It tells the borrower or the heirs that the loan balance is now owed in full and lays out the options: pay the balance, sell the house, sign a deed-in-lieu of foreclosure, or let the servicer foreclose. Expect it to arrive within a few weeks of the servicer learning about the death or the move, addressed to the borrower or the estate. The notice starts a window, not a countdown to a locked door, and servicers deal with heirs who need time every day. Call the number on the letter, say who you are and what your plan is, and ask for two things in writing: the current payoff figure and the date the six-month period runs from. Keep every letter. If the borrower is still living and a spouse remains in the home, ask specifically about the eligible non-borrowing spouse deferral, which can postpone the due date for a spouse who was not on the loan, provided HUD’s conditions are met.
How long do heirs have to sell a house with a reverse mortgage?
Six months from the due-and-payable notice is the standard window, and heirs can request up to two 90-day extensions on top of that, so the total can reach about a year. The extensions are at the discretion of the servicer and HUD, and they are not rubber-stamped. Servicers generally want to see progress: a listing agreement, a signed purchase contract, or a probate filing that shows someone has authority to sell. A family that has done nothing for five months is in a weaker spot than one that sent the servicer a signed cash contract in month two. Interest and mortgage insurance keep accruing on the balance every month, so time is not free even when the servicer is patient.
How much do we owe if the loan balance is more than the house is worth?
The lesser of the loan balance or 95% of the home’s current appraised value, and never a dollar more. A HECM is non-recourse, which means the house is the only collateral, and FHA insurance covers any shortfall between what the house brings and what is owed. Heirs are not personally liable and other assets in the estate are not reachable for the deficit. Here is the math as an illustration only: say the payoff is $180,000 and an appraisal comes back at $170,000. Heirs who want to keep the house can settle the loan for $161,500, which is 95% of the appraised value, and the remaining $18,500 is absorbed by the insurance fund. If instead the house appraises at $250,000 with the same $180,000 payoff, a sale captures the difference, less closing costs, for your parent’s care or for the estate. The servicer orders the appraisal that sets that 95% figure, so ask for a copy of it as soon as it exists.
Who has the authority to sell?
Whoever holds title or has legal authority to act for the person who does. If your parent is alive and competent, they sign the contract and deed themselves, even from the assisted living community. If they cannot, an agent under a durable power of attorney with real estate authority signs, and our guide to selling with a power of attorney in Georgia covers what that document needs to say. If your parent has dementia and there is no POA, the county probate court has to appoint a conservator first, and that takes months you may not have against a six-month notice; see selling a house when a parent has dementia. If the borrower has died, the estate’s executor or administrator sells, which means probate has to be opened before a deed can be signed, and our inherited house page walks through that. Servicers know probate takes time and will usually count a filed petition as progress toward an extension. Start the paperwork the same week the notice arrives.
What are the options besides selling?
Four, and they are worth naming so you can rule them out on purpose. First, pay off the loan and keep the house, with cash or a new mortgage in an heir’s name, for the lesser of the balance or 95% of appraised value. Second, a deed-in-lieu of foreclosure, where the estate hands title back to the servicer and walks away; it ends the obligation cleanly but gives up any equity above the payoff, so it only makes sense when the house is worth less than the loan. Third, let the servicer foreclose, which we do not recommend when there is equity, because the foreclosure sale price and fees come out of it before the family sees a dollar. Fourth, if a spouse who was not a borrower still lives in the home, the non-borrowing spouse deferral may keep the loan from coming due at all while they remain there. Selling to a third party is the path that turns equity into cash for care, and it is the one we handle.
What happens if the deadline passes in Georgia?
The servicer can foreclose without going to court. Georgia is a non-judicial foreclosure state: the lender advertises the sale in the county legal organ for four consecutive weeks, mails notice to the borrower at least 30 days before the sale date, and sells the property on the courthouse steps on the first Tuesday of the month. Once that advertisement runs, the calendar gets very short. The good news is that a foreclosure can be stopped right up until the sale by paying off or settling the loan, and a signed contract with a cash buyer who can close inside the advertisement period is usually enough for a servicer to postpone. If you are already inside that 30-day window, read our stop foreclosure page and call us the same day; a closing that funds the payoff before the first Tuesday is a real option, but only if it starts now.
Does selling a reverse mortgage house affect Medicaid?
A sale at fair market value converts the equity into cash, and that cash is a countable asset, so the timing matters if your parent may need Medicaid for long-term care. The sale itself is not a gift and does not trigger a look-back penalty; what causes penalties is transferring the home for less than it is worth. Where a HECM changes the picture is that the equity above the payoff may be smaller than the family expects, and it lands as cash at a specific date. Our guide to the Medicaid look-back and selling a house in Georgia covers the timing questions, and this is exactly the point where a Georgia elder law attorney should look at the numbers before the closing date is set.
How does a cash sale clear a reverse mortgage on time?
The closing attorney requests a payoff letter from the servicer, the buyer’s funds pay it at closing, and any remaining equity is wired to your parent or the estate. In practice: you send us the address, tell us where the loan stands (still occupied, notice received, extension granted, or foreclosure advertised), and send the POA, letters testamentary, or whatever authority document you hold. We send a written cash offer, usually within about 24 hours, with the payoff netted against it so you can see what the family keeps. Once you sign, the closing attorney orders the payoff letter, runs title, and confirms the servicer’s figures. We close in as little as 7 to 14 days when the paperwork is in hand, working to the servicer’s deadline, not ours. There are no repairs, no cleanout, no commissions, and no obligation before you sign. If the payoff turns out to be more than the house is worth, we will tell you plainly, because at that point a deed-in-lieu or the 95% settlement with the servicer may serve the family better than a sale, and we would rather say so than waste your six months.
How do we get started?
Call (770) 799-8760 or send the address and the due-and-payable letter through the form. We review the payoff and the authority documents with the closing attorney up front, put a written cash offer in your hands within about 24 hours, and close before the servicer’s clock runs out.