Selling a California Home With a Reverse Mortgage: Repayment and Heirs’ Options

Last updated November 13, 2026. Reviewed by the Cash Home Buyers CA team. Based on Consumer Financial Protection Bureau guidance on reverse mortgages; sources are listed at the end.

A reverse mortgage must typically be repaid, usually by selling the home, when the last borrower dies, and heirs who receive a due-and-payable notice have 30 days to buy, sell or turn the home over to the lender. If the loan balance is more than the home is worth, heirs can generally pay it off by selling for at least 95 percent of the appraised value.

This guide explains what the Consumer Financial Protection Bureau says about repayment and the options for selling a California home with a reverse mortgage. Loan terms differ, so your own loan documents and servicer control the details.

Reverse mortgage repayment at a glance

What happens to a reverse mortgage when the borrower dies?

The loan becomes due and payable after the death of the borrower and of any coborrowers or an eligible nonborrowing spouse. The lender sends a notice.

From that point, the CFPB says heirs have 30 days to buy the home, sell it or turn it over to the lender to satisfy the debt. When the home is worth more than the loan, the sale pays off the balance and the heirs keep the rest.

When it is worth less, a sale for at least 95 percent of the appraised value can settle the debt. Ask the servicer in writing about any extension of the deadline.

What are the options for heirs?

• Sell the home. Escrow pays the reverse mortgage from the proceeds and heirs receive anything left over.
• Keep the home. Repay the balance or 95 percent of the appraised value, whichever is less, and stay in the home.
• Turn it over to the lender. Handing the home to the lender settles the debt within the 30-day window described by the CFPB.

If the home came to you through an estate, see how we buy houses across California, including inherited properties.

How to sell a California home with a reverse mortgage

1. Get the payoff amount. Ask the servicer for the full balance and for how the appraised value is set.
2. Order or request the appraisal. The 95 percent option depends on the appraised value.
3. Note every deadline. Confirm the date on the due-and-payable notice and any extension in writing.
4. Choose how to sell. A direct cash sale can close within the window without the delays of a financed buyer.
5. Close through escrow. Escrow pays off the loan and sends any remaining proceeds to the owner or heirs.

See where we buy houses across California.

Selling a home with a reverse mortgage? Call (424) 435-2326 or request a cash offer. There is no cost and no obligation.

Reverse mortgage FAQ

When must a reverse mortgage be repaid?

Typically when the last borrower dies or sells the home. Repayment usually comes from selling the home.

How long do heirs have after the borrower dies?

Per the CFPB, 30 days after receiving the due-and-payable notice from the lender to buy, sell or turn the home over.

What if I owe more than the home is worth?

Heirs can generally pay off the loan by selling for at least 95 percent of the appraised value.

Can heirs keep the home?

Yes, by repaying the full balance or 95 percent of the appraised value, whichever is less.

Can a surviving spouse stay?

An eligible nonborrowing spouse affects when the loan becomes due. Ask the servicer about your spouse’s status under the loan.

Sources

• CFPB: Can my heirs keep or sell my home after I die?
• CFPB: What happens to my reverse mortgage when I die?
• CFPB: When do I have to pay back a reverse mortgage loan?

This guide is general information, not legal or financial advice. Loan terms differ; confirm deadlines and amounts with your servicer or a HUD-approved housing counselor.