The loan becomes due and payable if the borrower passes, sells the home, moves out permanently, or fails to meet the terms of the loan. When one of these occurs, there are three main options available: Repay the loan and keep the home: One option is for the borrower or their heirs to repay the loan and keep the home. This can be done by paying off the loan balance using other assets or financing. Sell the home to repay the loan: If the home is sold for more than the amount owed on the loan, the borrower or their heirs can keep any remaining proceeds. Deed the home to the lender: Transferring the home’s ownership to the lender is a last resort option typically chosen when the home’s value has declined, making it difficult to repay the loan through sale or other means. Fortunately, the FHA mortgage insurance and non-recourse feature serve as an excellent safeguard in this scenario. The borrower or their heirs will never owe more than the house is worth.