Hi CeeCee,

Your instinct to think this through before doing anything is the right one.  There are a few moving pieces here, and some of them cut against the idea of adding your name to the deed.

The Non-Borrowing Owner problem

If your name is on the title at the time your parents close the reverse mortgage, HUD classifies you as a Non-Borrowing Owner.  That means you are required to attend and complete HECM counseling and sign the mortgage documents.  You would not be a borrower, but you would be tied to the loan documents.  Most people in your situation do not want that added complexity, and it does not actually help you accomplish your goal.

Adding your name after closing

You could be added to title after the loan closes, but this is not as simple as it sounds.  Your parents' loan documents almost certainly require them to notify the servicer of any title changes.  Adding a non-spouse, non-borrower to the title of a property with an existing HECM can trigger a review, depending on the loan documents and Florida law.  Do not do this without first talking to the servicer and a Florida real estate attorney.

Your actual goal - keeping the home after they pass

Here is what you really need to know.  When both parents pass away, the loan becomes due and payable.  As an heir, you have options.   If the outstanding loan balance is less than the home's value, you can refinance into a traditional mortgage and keep the property.  If the loan balance exceeds the home's appraised value, HUD allows heirs to purchase the property for the lesser of the outstanding balance or 95% of the current appraised value.  That is a significant protection that applies regardless of whether your name is currently on the deed.

You also typically have up to 12 months from the date the loan becomes due and payable to arrange financing, as long as you stay in contact with the servicer and demonstrate you are working toward a resolution.  The key is to communicate with the servicer early.

The homestead exemption question

This is a legitimate concern, and you are right to raise it.  Florida's homestead exemption provides meaningful property tax savings, and adding a non-resident owner to the deed can jeopardize that exemption.  Since you live out of state, putting your name on the deed now could cost your parents money every year in higher property taxes.  Talk to a Florida property tax attorney before doing anything with the deed.  This alone may be reason enough to leave the title as is until the loan becomes due.

The bottom line is that your parents do not need to add you to the deed for you to keep the home later.  Your rights as an heir already give you that ability.  Focus on making sure your parents' loan is set up correctly and that you know who to call when the time comes.

Reference: HUD Handbook 4000.1, Section II.B.2.i(C) - Individuals Required to Receive HECM Counseling, Non-Borrowing Owners (PDF page 540).