Although selling the home is the most common option, there are four that you can pick from as the heir to the debt. Selling The Home To Pay Off The Reverse Mortgage Debt If the house value has gone down, you might worry that selling the home will not pay off the full debt, however, the Federal Housing Administration has prepared for this shortfall. The idea behind reverse mortgages is to keep houses in circulation instead of being hoarded by families over time. This is why selling the home to pay off the debt is the expected process to follow. If the home’s value is less than the reverse mortgage, then FHA will cover the shortfall, satisfying the debt to the lender. If the home’s value is worth more than the reverse mortgage, as the heir, you will receive the difference once the debt has been paid. Keeping A Home With A Reverse Mortgage Debt If you decide to keep the deceased's home, you are permitted to do so as long as you pay off at least 95% of the loan. The Federal Housing Administration will pay the remaining 5% to satisfy the debt. Giving The Home To The Lender To Pay Off Mortgage Debt You may find that no one wants to buy the home in question. If this happens, you can opt to give the deeds of the property to the lender. Doing this means you will not receive the difference in value if the home is now worth more than the original debt. The process is called “deed in lieu of foreclosure.” You will be given a document to sign that legally transfers the home’s title and ownership away from you (the heir) and towards the lender. Doing Nothing To Pay Off A Reverse Mortgage Debt The last option is to do nothing. You can walk away from the home and allow the lender to foreclose the home. Doing this means you may not receive the difference in property value if the property sold for more than the loan was worth. If dealing with the debt is too much in your time of mourning, this option is available to you.