FHA Issues Guidance on Assigning Reverse Mortgages

The Federal Housing Administration on Friday announced relief for spouses of reverse mortgage borrowers who wish to remain in their homes after the spouse who took out the reverse mortgage dies.

The guidance allows lenders of FHA-insured reverse mortgages made prior to Aug. 4, 2014, to assign the mortgage back to FHA upon the borrower’s death. FHA said it would allow surviving non-borrower spouses to remain in homes provided they have clean title and keep insurance, taxes and maintenance up to date.