My parents have reverse mortgage. My dad died 5 years ago, my mom is in a nursing home, and I am a 53-year-old disabled woman living in the home. What do I do about living in my home? I have no place to go! – Sylvia

Hello Sylvia,

I am very sorry to hear of your circumstances.  We have seen this play out many times, where family members are living with the owners of a property with a reverse mortgage but then when the loan becomes due and payable, there was no provision made for that event and the family members have no means to pay the loan off.

The loan is and never was meant to be a multi-generational vehicle to allow families an endless opportunity to live in a property payment-free.  The time for families to consider the effect that the loan will have on future generations is before the loan closes or while the loan is in place with the knowledge that one day it will be due and payable, not after you find yourself in a situation such as this.

I don’t know if your parents obtained their reverse mortgage before you moved in with them or after, if you were disabled at that time or if that came later, but we all know this day will come and borrowers with a reverse mortgage or a regular loan for that matter must plan accordingly.

If your parents had to take out regular loans to be able to live in the property and now you had large house payments, you would be in the same situation if you could not make the payments. The reverse mortgage allowed mom and dad to live in the home, payment free for life (and apparently you as well for as long as they were also there) but unfortunately, it will not and cannot continue to do the same for generations to follow mom and dad leave the home.

Your options now are to pay off the loan with a new loan or with other funds available to you or to sell the home.  I do not know what your disability income is or what that would allow you to do, but those are the options with the loan your mom and dad had on their home.  As I stated, if they needed to keep a standard mortgage and a line of credit to continue to live there, you would also now be faced with that debt and those payments, so you would be in the same predicament.

If you feel that financing a new loan in your name is out of your reach based on your income, I would suggest that you first contact a real estate professional and determine the value or most probable selling price if you were to sell the home.  Compare that to the balance owed on your parent’s latest reverse mortgage statement and hopefully there is still adequate equity in the property so that a sale would net you enough money to set you up in a new location.

HUD also has services available for those needing assistance and you can check the websites for other services in your area.  Please do not wait to hope that the circumstances will change because that would not benefit you.

I know this is a very difficult time, but you need to know what your options really are and the only way to find out is by contacting the proper professionals to see where you stand before you receive notice that the loan has been called due and payable.

Related: 

How Will a Reverse Mortgage Impact my Kids and Family?