What Are the Reverse Mortgage Requirements After You Close

One of the biggest draws of a reverse mortgage is the elimination of the required monthly mortgage payment.

For many older homeowners, removing that obligation creates breathing room, improves cash flow, and makes it possible to stay in a longtime home.

The monthly payment goes away, but the responsibilities of owning the home do not.

Understanding what stays in place after closing is one of the most important things a borrower can do before signing anything.

The loan remains active as long as the ongoing requirements are met; if they are not, the loan can fall into default.

💰 How a Reverse Mortgage Changes the Payment Structure

With a traditional mortgage, the monthly payment is the primary obligation, but with a reverse mortgage, that structure changes.

The loan balance generally grows over time as interest and fees accumulate, and no monthly principal and interest payment is required.

Three ongoing requirements take the place of that monthly payment:

• The borrower must continue living in the home as a principal residence
• The borrower must pay the required property charges
• The borrower must keep the home in good condition

These are the terms that keep the loan in good standing.

The Home Must Remain the Principal Residence

A reverse mortgage is tied to the home the borrower lives in.

The property must remain the borrower’s principal residence for the life of the loan, and permanently moving out can trigger repayment.

This requirement also connects to annual paperwork that catches some borrowers off guard. More on that below.

Property Charges Must Be Paid

Staying current on property-related charges is one of the most critical ongoing requirements.

Depending on the property, those charges can include:

• Property taxes
• Homeowners insurance
• Flood insurance, when required
• Homeowners association dues
• Condominium fees
• Ground rent
• Special assessments tied to the property

The monthly mortgage payment goes away. These expenses do not.

🏡 Property Taxes

Property taxes are among the most important ongoing obligations because unpaid taxes can quickly push a loan into default.

How taxes are handled depends on when the loan was made.

• For loans made after April 27, 2015, lenders evaluate the borrower’s ability to pay future property taxes and insurance at origination and, in some cases, set aside a portion of the loan proceeds to cover those costs.
• For loans made before that date, borrowers generally budget for taxes and insurance on their own each year.

If property taxes are paid in installments rather than in a single annual payment, let the loan servicer know, as a partial-year payment schedule can be mistaken for a missed payment, triggering unnecessary follow-up.

Many states offer senior property tax exemption programs that reduce payments for eligible older homeowners.

These programs often require a separate application and may have specific timing requirements tied to when the tax bill is issued.

The local tax collector’s office is the right place to start for information on what is available.

Homeowners Insurance Stays in Place

Homeowners’ insurance must remain active on the property after closing. The coverage protects the home against unexpected damage and is required under the loan terms.

In some locations, flood insurance is also required.

Insurance may be paid directly by the borrower or handled through funds set aside during loan origination.

Either way, the requirement remains that the home is properly insured.

HOA Fees, Condo Dues, and Other Property Charges

Depending on the property, additional charges may also remain the borrower’s direct responsibility.

These can include:

• HOA dues
• Condominium association fees
• Ground rent
• Special assessments

When loan proceeds are set aside to cover property taxes and homeowners’ insurance, that set-aside does not automatically extend to HOA fees, condo dues, or ground rent.

Those charges typically remain the borrower’s responsibility regardless of how the loan was structured.

Understanding exactly which bills stay in your name is one of the clearest reasons to review the loan structure carefully before closing.

🛠️ Maintaining the Home

The property must be kept in good condition throughout the life of the loan.

When the reverse mortgage was originated, the lender confirmed the home met HUD property standards, and maintaining that condition over time is the borrower’s responsibility.

Normal repairs and upkeep matter.

If the servicer identifies a condition concern, an inspection may be conducted after notice is provided.

Repairs are generally required to begin within 60 days of notification.

For borrowers who face cost as a barrier, the Area Agency on Aging may be able to connect homeowners with repair assistance programs.

They can be reached at 1-800-677-1116 or through eldercare.acl.gov.

Hiring a contractor

Older homeowners can be common targets for contractor fraud, particularly when repairs are needed on an aging home.

Before hiring anyone for repair work, the CFPB recommends:

• Getting estimates from multiple contractors
• Asking trusted people for referrals
• Verifying licensing through the state contracting board
• Having a lawyer review the contract before signing
• Confirming that the written contract matches what was promised verbally
• Being cautious of unsolicited door-to-door solicitations

📝 The Annual Occupancy Certification

Each year, the lender or servicer sends a notice, typically a postcard or short form, asking the borrower to confirm the home is still their principal residence.

Returning it promptly is important.

When an eligible non-borrowing spouse is listed in the loan documents, the certification may also confirm that the couple is still married and that the spouse continues to live in the home as a primary residence.

Ignoring the form creates unnecessary confusion and can trigger follow-up that a simple response would have prevented.

Going into a reverse mortgage with a clear picture of what the ongoing requirements look like, and more specifically, a realistic plan for meeting them, is the part most people skip.“ — Wade Betz, Winning With Wade | Mortgage Education and Strategy

🚫 What Happens When Requirements Are Not Met

If property taxes go unpaid, insurance lapses, the home falls into disrepair, or occupancy requirements go unmet, the loan can fall into default.

Default does not automatically mean foreclosure, but it does indicate that a loan requirement has not been met and that the situation needs to be addressed.

Contacting the lender or servicer early is the most important step, because the longer a default situation goes unaddressed, the fewer options remain.

Depending on the circumstances, repayment plans may be available.

For borrowers at least 80 years old facing critical circumstances such as long-term disability or terminal illness, an at-risk extension may also be possible, renewable annually with proof of need.

Resources If You Fall Behind

• HUD-approved housing counseling agencies offer free or low-cost guidance and can help borrowers understand available options. They can be reached at 1-800-569-4287 or through HUD.gov.
• An attorney can be especially valuable if foreclosure proceedings have already been initiated, particularly when timelines, notices, and resolution options need careful review.

✅ Reverse Mortgage Requirements Checklist

Before and after closing:

• Confirm that the home will remain the principal residence
• Understand who pays property taxes and how
• Keep homeowners’ insurance active
• Confirm whether flood insurance is required
• Identify any HOA dues, condo fees, ground rent, or special assessments
• Verify which charges remain a direct borrower responsibility
• Budget for maintenance and repair needs over time
• Respond promptly when the annual occupancy certification arrives
• Notify the servicer if property taxes are paid in installments
• Seek help early if meeting any requirement becomes difficult

📣 Frequently Asked Questions

Do reverse mortgage requirements include monthly mortgage payments?

No. A reverse mortgage eliminates the required monthly principal and interest payment. The ongoing requirements are living in the home as a principal residence, paying property charges, and maintaining the property.

What property charges remain my responsibility with a reverse mortgage?

Ongoing charges can include property taxes, homeowners’ insurance, flood insurance where required, HOA dues, condo fees, ground rent, and special assessments. Some costs may be covered through a loan set-aside depending on the loan structure, but others typically remain the borrower’s direct responsibility.

What happens if property tax payments are missed?

Missed property tax payments can cause the loan to fall into default. The most important step is contacting the servicer immediately to discuss available options.

Why is an annual occupancy certification required?

The certification confirms that the property remains the borrower’s principal residence, a central ongoing requirement of the loan. Returning it promptly prevents unnecessary confusion and follow-up.

Does a reverse mortgage cover home maintenance costs?

No. Keeping the home in good condition remains the homeowner’s responsibility. If the servicer identifies a problem, repairs may need to begin within a defined timeframe after notice is provided.

Where can I get help if meeting the requirements becomes difficult?

HUD-approved housing counseling agencies provide free or low-cost guidance and can be reached at 1-800-569-4287 or through HUD.gov. The Area Agency on Aging may also help connect homeowners with repair assistance programs through eldercare.acl.gov. If foreclosure proceedings have begun, consulting an attorney is advisable.