Homeowners with a reverse mortgage and no co-borrower can be required to repay the loan once they spend more than 12 consecutive months in a nursing home or other health care facility, the Consumer Financial Protection Bureau warns. At that point the house is no longer treated as the borrower’s principal residence, and the lender can call the loan due. A stay of a few weeks for rehabilitation does not trigger the rule; a long-term move does.
The rule matters most to families deciding whether a parent’s home will pay for care or has to be sold. A reverse mortgage lets a homeowner 62 or older borrow against the house with no monthly payment, but the loan stays in good standing only while the home remains the borrower’s main residence.
What the CFPB guide says about long absences
The bureau’s guide for reverse mortgage borrowers, You have a reverse mortgage: Know your rights and responsibilities, lays out three tiers of absence for a borrower with no co-borrower. An absence of two to six months calls for telling the lender or servicer that the borrower still lives there. An absence of more than six months for non-medical reasons ends the principal-residence status. An absence of more than 12 consecutive months in a health care facility does the same.
Once the home stops being a principal residence, the loan has to be repaid, usually by selling the house or handing it back to the lender in a deed in lieu of foreclosure. Anyone living in the home must move out unless they can pay off the loan. The guide also says lenders require borrowers to certify every year that the home is still their main residence, and it urges borrowers to sign and return that form immediately.
The medical clock is twice as long as the non-medical one. A borrower recovering from a fall or surgery has more than a full year before the loan can be called on those grounds, while a borrower who simply moves elsewhere has six months.
Anyone who has a parent or spouse on a reverse mortgage and a nursing home on the horizon should find out two things first. One is whether more than one name is on the loan. The other is how many consecutive months the borrower has been out of the house.
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The federal regulation behind the 12 months
The 12-month figure comes from the Department of Housing and Urban Development’s rule for federally insured home equity conversion mortgages, 24 CFR 206.27. It says the balance becomes due, upon approval of the HUD Commissioner, if a borrower fails to occupy the property for longer than 12 consecutive months because of physical or mental illness, and the property is not the principal residence of at least one other borrower. The final clause is what protects a couple on the loan.
Both conditions have to be met together: a long absence for illness, and no other borrower still living in the house. A husband and wife who are both named on the loan can keep it going while one of them lives in a nursing home, as long as the other stays in the home and keeps meeting the loan’s obligations.
The same regulation treats a borrower’s death the same way: the balance is due when a borrower dies and no surviving borrower lives in the home. HUD has separate rules that can delay that for an eligible spouse.
Who can stay in the house
The CFPB’s question-and-answer page on moving into a nursing home with a reverse mortgage says a co-borrower who stays in the home can keep living there and keep receiving loan payments, provided the loan’s requirements continue to be met. A non-borrowing spouse may also be able to stay without paying off the loan, depending on when the loan was made and whether the spouse qualifies as an Eligible Non-Borrowing Spouse under HUD’s rules.
That status is not automatic. A spouse who is not on the loan cannot count on staying in the home, and the paperwork from the time the loan was made is what settles it. The CFPB guide adds that after a borrower’s death, a spouse who is trying to sell the home or repay the debt may ask for a foreclosure delay of up to 180 days.
Moves that keep the loan from coming due
For a borrower approaching the 12-month line, the practical moves are few and specific. Call the servicer when the stay begins, not when the year is nearly up. Return every annual occupancy certification promptly. Keep a written log of admission and discharge dates from the facility, since the count is of consecutive months.
Borrowers who expect to return home should say so to the servicer in writing. The rule counts consecutive months away, so dated records of each admission and discharge are what show a lender where the count stands.
Reverse mortgage borrowers and their families can talk through the options with a housing counselor approved by HUD. The CFPB points borrowers to hud.gov or to 800-569-4287 to find one. Counselors answer questions about the loan at no charge, and a call before the 12th month is much better than one after a lender’s notice.
The care bill behind the house question
The loan rule is only half of the decision. A family has to know how a nursing home stay is going to be paid for if the house is not sold, and that depends on what Medicare covers, what Medicaid will pay, and how much the household can spend down first. Selling the home to repay the reverse mortgage turns equity into cash, and what is left over then counts toward those limits.
A borrower who can no longer live at home should also keep the house insured and the property taxes paid while away, since those are conditions of the loan and a lapse can put it in default on its own terms. The home stays the borrower’s responsibility during the whole absence.
Is a parent’s reverse mortgage about to meet a nursing home bill?
The detail that tends to get missed is that the 12-month rule and the care bill arrive together. A family can learn how long a stay may last in the same week that it learns what the stay costs, and the house is then asked to answer both.
Protect Your Savings From Care Costs walks through what Medicare pays for nursing care, and what it won’t, and Medicaid’s 5-year look-back before you give anything away. The guide includes 2026 figures on how the at-home spouse is protected and a care-plan worksheet to fill in with family.
Get the nursing care payment guide and the family care-plan worksheet →
This article was produced with AI assistance and edited for accuracy against the sources linked above.
