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Reverse mortgage guide
If a fire, flood, hurricane, or earthquake damages your home and you have a reverse mortgage, call your loan servicer first, even before you know what you need. Your loan terms keep going after a disaster: the home must stay your primary residence, and you must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms. Tell your servicer in writing if you're displaced and plan to return. Insurance checks usually go through your servicer, which releases the money as repairs get done. FEMA, the SBA, and free HUD-approved housing counselors can help fill the gaps.
Natural disasters are stressful enough without worrying about your reverse mortgage. When one hits, the questions I hear are always the same. Do I still have to pay my property taxes? What happens to the insurance check? What if I can't live in the house for months?
Here's the good news: there are clear steps that protect you and keep your loan in good standing. This guide walks through them in the order you'll need them. These rules are for the HECM, the FHA-insured reverse mortgage most people have. If you have a proprietary (jumbo) reverse mortgage, the steps are similar, but call your servicer to confirm their rules.
Take care of yourself and your family first. Then, as soon as you can, call your reverse mortgage servicer. That's the company that sends your monthly statement. It may not be the company you got the loan from.
If you're not sure who your servicer is, check your last statement. If your papers are gone, call HUD at (800) 569-4287 to find a free HUD-approved housing counselor who can help you sort out who to call.
When you call, tell them:
Then ask them:
Write down the date, the name of the person you spoke with, and what they told you. You'll be glad you did.
A phone call is a good start. A letter is better. The Consumer Financial Protection Bureau suggests sending your servicer a written notice of the damage by certified mail and keeping a copy. If you're displaced, say clearly in that letter that you intend to return to your home once it's repaired.
That letter matters because of the occupancy rule, which I'll explain next.
A reverse mortgage requires the home to be your primary residence. Normally, the loan can become due if you're away for more than 12 consecutive months for health reasons.
A disaster can change that picture, but don't assume it does. If you're displaced and plan to return, tell your servicer right away, in writing, and ask how the occupancy rules apply while your home is repaired. The key is that your servicer knows you're coming back. So:
If you decide not to return, that's a different path. We'll get to it in Step 6.
This is the one people forget in the chaos. There are no required monthly mortgage payments on a reverse mortgage, but the other obligations don't stop for a disaster. You must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms.
If a disaster makes those bills hard to pay:
If you have a fully funded Life Expectancy Set-Aside (LESA), your servicer is already paying your property taxes and insurance from it; with a partially funded LESA, you get the money twice a year and pay the bills yourself. Confirm with them that payments are still going out.
File your homeowners insurance claim as soon as you can. Some policies have deadlines for filing. Before you clean up or start repairs, take photos and video of the damage. Keep receipts for anything you spend, like a hotel or emergency tarps.
Because your servicer has a lien on your home, the insurance check will usually be made out to both you and your servicer. That surprises a lot of people. It doesn't mean the servicer keeps your money.
Here's how it usually works:
Ask your servicer exactly what paperwork they need for each release. Keep records of every conversation with your insurer, your contractor, and your servicer.
If repair costs are more than your insurance pays, you have options:
If your claim is denied or underpaid, ask the insurer for the reasons in writing and ask how to appeal. Your state's insurance department can also help.
Sometimes a home is destroyed, and rebuilding isn't the right answer. That's okay. You have choices.
Your loan terms may require the insurance money to go toward repairs when the home can be restored, so talk with your servicer first. If the home isn't rebuilt, the insurance money generally goes toward paying off your reverse mortgage, and anything left over goes to whoever is legally entitled to it, usually you or your estate. You can also sell the property, even as a damaged lot. Because a HECM is non-recourse, if the property sells for less than the loan balance, you don't pay the difference.
From there, many people use what's left to buy their next home. Some use a HECM for Purchase to buy a home that fits them better, with no required monthly mortgage payments afterward. You must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms.
Lelia has done five reverse mortgages with ZYNG. After the fire in Paradise, California, she moved to Colorado, and after a few moves she's now in what she calls her forever home. In the video, she shares why she chose a reverse mortgage: she isn't tied to one house, she has no monthly mortgage payment, and she kept more of her savings instead of putting it all into the home. Her most recent purchase closed in three weeks and three days.
Lelia's experience is her own; closing times and results vary. With a reverse mortgage, you must still pay property taxes, homeowners insurance and upkeep, and meet the loan terms.
0:00Josh: Okay, we're here with Lelia, probably my most loyal reverse mortgage customer. How many reverse mortgages have
0:08we done together? Lelia: Five. Josh: Five. And is this the fourth house you've purchased with me with the reverse mortgage? Lelia: The first house was in Grass
0:16Valley, California. Josh: Okay. Lelia: I left that in 7 months. There wasn't enough sun in the yard. And then I went to Paradise. Josh: Okay.
0:26Lelia: And then Paradise, we had some trouble with fire. It was an epic fire. Josh: Yep. Lelia: Everything went down. Josh: And then that
0:34brought you back out here to Colorado, where you've been. Lelia: Came back to Colorado. I came to Loveland. Josh: That was our third house together. Lelia: And then I
0:43wanted to get closer to Boulder, and I moved to Longmont, and I hated Longmont, and here I am in my fifth
0:51house, and look who showed up. Josh: So why don't you talk to me a little bit about a reverse mortgage. What is it
0:59that made you want to do the reverse mortgage? Lelia: Money, money. Well, you know, I always thought that a reverse mortgage
1:08meant that you had to stay in that house no matter what, and then I discovered that you didn't have to stay in the house, and that's what really turned me
1:17on to wanting to get one. Plus, you have no mortgage. Josh: Right. So you mean in terms of being able to
1:25travel and stuff, and still have a place to come back to as your primary residence? Lelia: Still have, yeah. Josh: Perfect. And then the money
1:34part has kept you a little bit more liquid. You didn't have to put everything you had into a house, so you're able to keep some money. Lelia: Yeah. And
1:41you were magical this time. This last time, from the day I saw the
1:48house, it was 3 weeks and 3 days that we closed. Josh: Yeah, now that's amazing. This last one was really quick. So any advice
1:57you have for anybody looking to get a reverse mortgage, or questioning it? Lelia: Absolutely do it. And this is the guy,
2:04this is the man you want to go to, because he knows exactly how to do everything quickly and perfectly. Josh: Yeah.
2:11Lelia: And then he shows up when you have the house, if you're lucky. Josh: Well, I really appreciate that. I appreciate you, and it's been a pleasure working with you,
2:19and I'm so happy that you're in your forever home now. Lelia: And this is the one. Josh: This is the one. Lelia: The one, I promise.
2:27Josh: Yeah. Perfect. Thank you.
When the President declares a major disaster, HUD usually puts a temporary hold on foreclosures of FHA-insured loans in the affected area, often 90 days from the declaration, and sometimes longer. HUD often gives servicers extra time on their deadlines too.
That breathing room is real, but it has limits:
Ask your servicer whether a moratorium applies to your loan and when it ends.
A disaster can make a hard time harder. If the last borrower dies, the loan comes due, and the heirs have the same options as always: sell, keep the home by paying off the loan, or hand it over. If the home lost value in the disaster, a new appraisal may help, since heirs generally don't pay more than the lesser of the loan balance or 95 percent of the appraised value.
Heirs should call the servicer early and ask about any disaster extensions. See Reverse Mortgages and Heirs.
Sadly, after every disaster, scammers come out of the woodwork. Older homeowners are a favorite target. Be wary of:
Get more than one estimate. Check that a contractor is licensed and insured. Make sure the written contract matches what you were promised. When in doubt, verify everything with your servicer, FEMA, or HUD before handing over money or personal details.
Yes. Your obligations continue. If the bill is hard to pay, call your county about relief and your servicer about a repayment plan before you fall behind.
A disaster doesn't automatically end your reverse mortgage, but a long time away from the home can raise occupancy questions. Tell your servicer in writing that you're displaced and plan to return, and keep your contact information current.
Usually it's made out to you and your servicer together. The servicer holds the money and releases it to pay for repairs as the work gets done.
Generally yes, if your loan is in good standing and you have money available. Ask your servicer.
Talk with your servicer first. Your loan terms may require the insurance money to go toward repairs if the home can be restored. If it isn't rebuilt, the insurance money generally pays down the loan, and anything left goes to whoever is legally entitled to it, usually you. Because a HECM is non-recourse, you don't pay more than the home is worth.
In federally declared disaster areas, HUD usually puts a temporary hold on foreclosures of FHA-insured loans. It doesn't cover every case, and it doesn't erase the loan terms. Ask your servicer.
Possibly. If you buy a new home, a HECM for Purchase may help. See How a Reverse Mortgage Works.
A natural disaster can feel like the end. It isn't. People rebuild. Others start fresh somewhere new and find it was the right move. Either way, you don't have to figure it out alone.
If you have questions about your reverse mortgage after a disaster, call us at 530-888-6000. We'll help you figure out what to ask and who to call next.
ZYNG Mortgage, Inc., NMLS #76801. A reverse mortgage has no required monthly mortgage payments and uses your home's equity. Fees, mortgage insurance and other costs can be added to the loan balance, and the balance grows over time as interest is added, so your equity typically decreases. When the loan becomes due, the home may need to be sold, or the loan repaid from other funds. Interest is not tax-deductible until it is paid, in part or in full. You keep title to your home and must keep paying property taxes, homeowners insurance and upkeep, and meet the other loan terms; not doing so can make the loan due and could lead to foreclosure.
This material is not from HUD or FHA and was not approved by HUD or a government agency.
HECM count at the top of this page: HUD data through September 2026 (source, opens in a new tab).
