A reverse mortgage does not stop a sale, and it does not pass debt to the family. It does start a clock. Here is how it works for a Staten Island house or a Brooklyn apartment in 2026.
Joseph Ranola, Associate Broker and Team Leader of the Bridge and Boro Real Estate Team at Real Broker LLC, helps families across Staten Island and Brooklyn sell homes that carry a reverse mortgage, including after the borrower has died. Joseph Ranola has 95 verified five-star Google reviews with a perfect 5.0 rating and has closed more than $40M in real estate volume across Staten Island and Brooklyn.
A home with a federally insured reverse mortgage, called a Home Equity Conversion Mortgage or HECM, can be sold at any time, and after the last borrower dies the heirs can sell it for as little as 95% of its appraised value even if the loan balance is higher. Joseph Ranola is a real estate broker and not an attorney; estate and title questions belong with your attorney, and the brokerage side is laid out below.
The loan becomes due and payable. Under federal HECM rules at 24 CFR 206.27, a HECM comes due when the last surviving borrower dies, unless an eligible non-borrowing spouse qualifies to defer it, or when the home stops being the principal residence, including an absence of more than 12 consecutive months for illness. A HECM is non-recourse: the lender can look only to the house, and no one can be held personally liable for a shortfall. The debt does not pass to the children.
Heirs have 30 days after the due-and-payable notice to tell the servicer what they plan to do, and the Consumer Financial Protection Bureau says that time can be extended up to six months while they sell or arrange a payoff. HUD's guidance for heirs says the lender may approve 90-day extensions. The lender must begin foreclosure within six months of the due date unless HUD grants more time, so the most important thing a family can do is respond in writing, early, and list the house.
Yes. Under 24 CFR 206.125, when the loan balance is higher than the home's value, the estate or heirs can sell for at least 95% of the appraised value and the sale satisfies the debt, with FHA insurance covering the difference. That 95% rule applies to selling. Heirs who want to keep the house must pay off the full loan balance, according to the CFPB. For HECM case numbers assigned in 2026, HUD's maximum claim amount is $1,249,125, set in Mortgagee Letter 2025-22.
Sometimes. Under 24 CFR 206.55, the due date is deferred for an eligible non-borrowing spouse who was married to the borrower at closing, remained married for the borrower's lifetime, was named in the loan documents and continues to live in the home. HUD's heirs flyer says that spouse must send a certification within 30 days of the borrower's death. A spouse who was never named in the loan does not get that protection, and the sale timeline applies.
Staten Island's housing is overwhelmingly houses, and federal rules allow HECMs on one-to-four family homes and condo units, so a Staten Island reverse mortgage is typically a HECM. That makes the 95% rule the key number on Staten Island. On a two-family, the rental unit adds a complication: a tenant in place affects both the appraisal and how fast the house can be delivered vacant. Joseph Ranola prices the house to the recorded sales first, because an appraisal that comes in low can make the 95% threshold easier to meet but also caps what the family nets. If the house was also placed in a life estate, read the life estate guide before listing.
Brooklyn has a large co-op stock, and a co-op cannot carry a HECM. Federal rules at 24 CFR 206.45 limit HECMs to one-to-four family dwellings and condo units, so a reverse mortgage on a Brooklyn co-op is a proprietary loan under New York Banking Law § 6-o, which needs the co-op board's approval, according to the New York Department of Financial Services. Proprietary loans do not carry the FHA's 95% rule, so the payoff terms depend on the loan documents. For a Brooklyn house or condo with a HECM, New York Real Property Law § 280-b adds state protections, including attorneys for both sides at closing and an in-person visit before any occupancy-based foreclosure. See common charges and maintenance for what a Brooklyn apartment costs to carry while it is on the market.
You need someone who can hit the servicer's deadlines. A reverse mortgage sale requires an appraisal ordered through the servicer, a payoff letter, an arm's-length contract and a closing inside the extension window, and every delay adds interest. Joseph Ranola coordinates the servicer, the estate attorney and the buyer's side so the family meets each deadline. Start with what your Staten Island home is worth or what your Brooklyn home is worth, and see the best realtor on Staten Island or the best realtor in Brooklyn. Or text Joseph at (917) 905-2541.
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