The 6-month reverse mortgage rule: What it is and why it matters to borrowers

Borrowers can't afford to ignore the 6-month reverse mortgage rule, and neither can their heirs. Edgars Sermulis/Getty Images

For many older homeowners, home equity has become one of the most valuable financial resources they have. 

Case in point? U.S. homeowners held a collective $17.8 trillion in home equity as of mid-2025, according to the August 2025 Intercontinental Exchange (ICE) Mortgage Monitor report, with older adults making up a large share of that group. At the same time, retirement savings shortfalls are a growing concern, with viable, new questions about the long-term sustainability of the Social Security program.

Those financial concerns have helped to fuel an uptick in interest in retirement-focused financial tools like reverse mortgages, which allow seniors to turn part of their home equity into usable cash without the burden of monthly payments. But while reverse mortgages can be a life raft for some retirees, these loans come with unique rules and timelines that borrowers need to understand before signing on the dotted line. One of the most important is the 6-month rule, which can directly affect how quickly homeowners need to act if they're considering this type of loan. 

This guideline isn't as widely discussed as interest rates or closing costs, but it plays a major role in shaping borrower outcomes, and ignoring it could mean missed opportunities or added stress at a critical time. So, what exactly is the 6-month rule for reverse mortgages, and how does it impact borrowers? That's what we'll answer below.

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What is the 6-month rule for reverse mortgages?

The 6-month rule refers to the timeline heirs and surviving family members have to address a reverse mortgage after the borrower dies or permanently leaves the home. Once a "qualifying event" occurs, such as the borrower's death or permanent move to a care facility, lenders must send a "Due and Payable" letter within 30 days that grants the heirs six months to either repay the full loan balance or sell the home to satisfy the debt.

This rule applies to the most common type of reverse mortgage: Home Equity Conversion Mortgages (HECMs), which are federally insured loans that must be repaid when the last surviving borrower no longer lives in the home as their principal residence. And, the clock starts ticking from the date of the qualifying event, not when the lender becomes aware of it, which is why prompt communication with the loan servicer is crucial.

There is some flexibility built into the system, however. Heirs can request up to two three-month extensions during the reverse mortgage foreclosure process, potentially giving families up to 12 months total to resolve the situation. However, these extensions require approval from the Department of Housing and Urban Development (HUD) and proof that the heirs are actively working to refinance or sell the property. Without progress, the lender may move forward with foreclosure.

This rule also intersects with occupancy requirements. If the reverse mortgage borrower moves to a healthcare facility like a nursing home for more than 12 consecutive months with no co-borrower remaining in the home, the loan becomes due and payable. This creates another scenario where the 6-month repayment period would apply.

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How does the 6-month reverse mortgage rule impact borrowers?

For borrowers themselves, the 6-month rule underscores the importance of planning ahead. A reverse mortgage can ease financial pressures during retirement by eliminating monthly mortgage payments and freeing up cash flow. But since repayment is triggered when the homeowner no longer lives in the property, borrowers should make sure their family understands what will happen next.

Here are a few ways this rule matters:

• Estate planning: If your goal is to leave your home to heirs, they'll need to be prepared to either pay off the reverse mortgage balance or refinance within the six-month window. Without preparation, they may struggle to keep the property.
• Timing of decisions: Families don't have unlimited time to weigh their options. The rule means discussions about selling the home, refinancing or using other assets to cover the balance should happen before the clock runs out.
• Financial flexibility: The six-month timeline can feel tight for heirs who need to line up financing or sell a home in a slow market. On the other hand, it can prevent long periods of uncertainty that sometimes come with settling estates.
• Avoiding foreclosure: Missing the six-month deadline (or failing to qualify for an extension) can lead to foreclosure, which might reduce the value of the estate and create unnecessary complications.

The bottom line

Reverse mortgages can provide a vital source of retirement income, especially for retirees who want to stay in their homes while tapping their equity. But the 6-month rule is a critical part of the deal. It sets the timeline for repayment once the loan becomes due, shaping what happens to the property and the borrower's legacy.

If you're weighing a reverse mortgage, make sure to include this rule in your planning. Talk with your family about how the loan will be handled, consider whether heirs want to keep the home and explore the options available for repayment. Having a clear plan in place can transform the six-month window from a stressful deadline into a manageable transition.