Where am I going to live once my Mom passes away?

Under the newly revised federal rules for Reverse Mortgages, lenders must allow heirs up to 30 days to let them know what they plan to do and up to 6 mo to arrange financing for 95% of Fair Market Value (FMV) of RM’d house. FMV could be less than the balance due on the RM too. Heirs cost limited to 95% of FMV. RM's can apply to HUD for negative equity situation for federally backed RM.

The choices are just not going to be simple. But you can take charge of all this.

About the RM, perhaps you could pay it off but you need to find out what the amount would be. Now the terms on federally backed RM changed last year and now the mortgage holder has to go through a specific lists of things to do to be in compliance for HUD. Under the newly revised fed rules, lenders must allow heirs up to 30 days to let them know what they plan to do and up to 6 mo to arrange financing for 95% of FMV of RM’d house. (you can stay in the house during that period of time too) If not, property can be foreclosed on &/or sold on the open market. There is no gray area, the RM has to be repaid. If it’s an FHA/HUD backed RM & house sells for less than owed, feds pay the difference to the mortgage holder (so you should never feel bad for the mortgage holder). Family does NOT have to make up the difference. But if you want to keep the house, you have to pay 95% of the FMV & NOT THE WHOLE RM amount due. This is very important to understand the difference.

The RM companies aren't exactly making this clear to mortgage holders too. But it is now federally required for compliance for the lender to allow for family to be able to buy the home at 95% of the FMV. No more paying off the whole RM amount, if the RM is federally backed.

Now the 95% of the FMV, to me, is the key to figuring out if trying to buy the house is worth it. If the FMV is 100K, could you manage the 100K? Look at the current tax assessor statement to see what they place the value at. I'd contact a couple of Realtors to see what the market looks like for the price for selling the house. Is the Realtors selling price close to what the RM is? If the Realtors are coming up with selling it at 150K, then that's more of what the FMV is.

If it seems, the FMV price could be something you could afford, you need to keep the value low. So if there is an opportunity for lowering the value of the tax assessor, you need to file for a hearing to do that. (THose are usually done when you get your tax bill and you have like 60 - 90 days to file for a hearing).

Now your situation is also different in that you wan the house to look as crappy and downmarket as possible. You need for it to be the worst property on the block as the FMV needs to be hugely less than the 268K that is owed. Understand? Doing anything to make the house cute or nice, is totally not working in your favor in the long run. Understand? Mom just needs to do whatever is the minimum required from her on the RM - like pay for taxes, insurance and minimum maintenance. Painting the house or doing a new roof for putting in pretty flower beds are totally NOT what you ever want to do on mom's house. It needs to be as downmarket as possible short of you getting a code violation from the city.

Now the best thing - and I know this may be hard to do - would be to have mom stay at home till she dies. Each month you set aside as much as you can of your own personal SS & or retirement. Everything at the house, needs to be funded by mom's income as much as possible. You are probably caregiving for free so doing this makes total sense. If you can do this @ 1K a month for 2 years, you will have 24K saved. 24K is quite a lot and will give you some creating room as to what your options are for mom. If you can salt away even more than 1K, even better!

You sound like you need help & are overwhelmed. I would contact the local Area on Aging to see what programs mom can qualify for. So that there are others coming over to help out and for you to be able to get out & about. Get Meals on Wheels to deliver a couple of days a week to free up your kitchen duty time if you find you find cooking meals to be drudgery. Have you been to a library lately?? Go to the library as they are not what they were when you were little. They have all sorts of classes and activities and usually for free or a pittance. Mine has yoga, cooking and genealogy classes every week as well as tons to movies all for free. It will get you out and speaking with others. Go online to find what museums have free days for local residents or reduced rates and get out and go. Is there anyone doing a community garden in your neighborhood? Go and help out there. Take an hour here and a couple of hours there to get out the house and the whole mom situation. Just mom & house 100% is too overwhelming and depressing of a daily visual, you need to do things that totally change you visual and interactions with others for a bit of time. Good luck and let us know how its going.

Sounds like you need a couple things - one to get all the facts about your options with the reverse mortgage, there are a lot of different ways those things are written and they could vary quite a bit not just state to state but company to company. An estate planner or eldercare attorney could be a good option to see what is really going to happen, though I suspect strongly that the posters above have it pretty much correct. There could also be the option of a bankruptcy, which would beat being homeless, but get advice on what that means for your credit and your ability to rent a decent place somewhere. Second, see if you can get evaluated for depression. I agree with the other folks here that you have options and many things that would make your life worth living - but depression might be taking away your hopes and dreams, even your most realistic ones, and magnifying yoru fears, even the ones that have no basis in reality. Thinking you are best off if your life is over when your caregiving is over sounds a bit depressive to me!!

@ Captain -- love your sense of humor!

i live in a concrete bunker in the forest . somewhere between there and 268, 000 bucks there oughtta be a lot of options. i just dissolved an ambien under my tongue and am chasing a mosquito all around my pc screan with my cursor . life aint bad on the lower spectrum..

glornorth59, I forgot to mention, as long as you are not on the mortgage note, you don't need to pay anything. The funds will come out of the sell of the house.

Here's an idea, check apartments over in Norfolk, Portsmouth, and Chesapeake as they are just a short drive back to Virginia Beach, for example if you had placed your Mom in an aging care community. Or if you want a larger metro area, check out Richmond or if you like a college town there is Charlottesville, rich in history and the University of Virginia.

Depending on your work background, look for new employment.... find something you really like doing.

Suffolk has really grown, but the housing is still very affordable. There are also some very nice owner only mobile home parks in Chesapeake. Norfolk is cheap, but you get what you pay for there. Lived in VB for 30 years. I'll never go back.

I live in the Fairfax/Loudoun County area of northern Virginia. Since we are right next door to Washington D.C., housing is very expensive here. To give you an idea, a small 3 bedroom rambler or Cape Cod in Falls Church runs around $600k to purchase. Apartments $1,500 not including gas/electric. Therefore, housing programs would also be more expensive.

glornorth59, have a Realtor give you the market value of your Mom's home, and see if there is any equity in the house that you can use to pay back the reversible mortgage. And also note, if you have your mother move to an aging care community, you will need to check the reverse mortgage note to see when the due date becomes active once the homeowner leaves the residence for a aging care community.... some reverse mortgages allow a relative to remain in the family home for up to a year.

Fairfax County has excellent housing programs. So call them now, because the waiting lists are open now.

GloNorth59,
$2,000/ month SS is $24,000 / yr tax exempt. That is more than a lot of people take home after taxes. So take a deep breath and make a plan, you will be OK.
If the amount owed on mom's house to retain it is $268K, it is a pretty high end home. You are in Virginia Beach, VA according to your profile. Virginia, including Virginia Beach has one of the higher median incomes in the USA, which means it is an expensive place to live.
I would rather move and have my own life than try to live with relatives. Remember guests are like fish, they start to stink after a few days. Be grateful they turned you down. Today with Skype and the internet you can keep in touch with loved ones from anywhere.
Likely the first thing you need to do is give up the house, it may be too much for you. Would you even be able to pay the taxes and upkeep? Do not go into debt trying to hold on to an asset that will choke you financially. I know homes, particularly childhood homes can be difficult to give up. I know it is difficult to step down from a lifestyle you are accustomed to. Building a financially stable foundation will be worth it. The stress of trying to hold on to something you cannot afford is immense.
Second thing, based on your other posts, your son, his fiancé and daughter are living with you, you need to give them the opportunity to stand on their own two feet. They will not be moving with you.
When mom passes, you let the bank take the house, move to a more modest neighborhood, in a lower cost city/state. Remember your SS income will be the same regardless of where you live, make the most of it.
Pick a city that is safe, has good health care and a social environment you are comfortable with. Get a small apartment. Perhaps pick a walking city that allows you to not own a car. Minimize your monthly expenses, save a little every month and splurge occasionally. You will be on a budget, but you will be OK. You can do this!

I would put myself on waiting lists all over for senior subsidized housing.

How long have you been getting close to $2,000 a month from Social Security? You've been living with mom for nine years. What have you been doing with your money??

I made a typo error - that is $268,000 dollars I will need to come up with or deed the house over HUD.