One of the events that would cause your reverse mortgage to become due and payable is the death of the last surviving borrower. What happens then?
For an FHA Reverse Mortgage your estate (or heirs) will have 6 months from the date of your death to repay the loan. They may be eligible for up to two time extensions of 3 months. These time extensions are to be used to provide time to sell the home or obtain a new loan to pay off the balance of the reverse mortgage.
If the home is sold for more than the balance of the reverse mortgage, the remaining proceeds from the sale are your heirs to keep.
A reverse mortgage is a non-recourse loan. Per Wikipedia: "Non-recourse debt or a non-recourse loan is secured loan (debt) that is secured by a pledge of collateral, typically real property, but for which the borrower is not personally liable. If the borrower defaults, the lender/issuer can seize the collateral, but the lender's recovery is limited to the collateral. If the property is insufficient to cover the outstanding loan balance (for example, if real estate prices have dropped), the difference between the value of the collateral and the loan value becomes a loss for the lender."
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