Non-Borrowing Spouse

Non-Borrowing Spouses Are Now Protected

Effective April 2014, HUD announced new changes for non-borrowing spouses of reverse mortgages. In other words, those who are either under 55 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 reverse mortgage borrower, if the home is sold, or if the borrower fails to pay taxes and insurance or otherwise comply with the loan terms.

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 but were unable to because of this rule. This change brings welcome opportunities for non-borrowing spouses.

The Non-Borrowing Spouse Must:

  1. Establish legal ownership or right to remain in the home
  2. Continue to meet the obligations of the loan signed for by the original borrowing spouse. This includes paying the property taxes, insurance, and all other property charges that apply.