8189 / Do heirs have to sell property that is subject to a reverse mortgage to repay the loan upon the borrower’s death?

No, repayment can be accomplished in a number of different ways. If the heirs – or any one heir – want to buy the house, they can pay off the loan and take title. This can be accomplished by putting up the cash required to pay off the loan, by using a conventional mortgage, or using a home equity loan on another property. In reality, the financing options available are limited only by the imagination and credit worthiness of the buyer. If someone wants to buy the property, the only obstacle that they are likely to encounter will be how to come up with the entire amount of the existing mortgage balance regardless of the home’s appraised value.

There is also nothing stopping a would-be buyer from negotiating the price for which the lender is willing to sell the house; this is particularly true in cases where the market value of the house won’t cover the loan.