When you have a reverse mortgage on your home, when the last spouse dies, the heirs have a time period in which to deal with the home and it’s associated reverse mortgage.
Your heirs will typically be given six months before the reverse mortgage is due and payable. During that time they can choose to pay off the outstanding balance on the reverse mortgage; with cash, or by refinancing with a regular mortgage, or selling the home and using some of the proceeds to pay it off.
If the home is sold, any cash remaining from the sale and paying off the mortgage, is left to the estate. If for some reason the reverse mortgage balance is greater then the home can be sold for, the home can be turned over to the bank, who will accept it as payment in full for the balance of the mortgage. The heirs will not be responsible for anything more than turning the home over to the lender. The main purpose of a reverse mortgage is to keep you in your home as long as possible. The terms and options of repayment are designed to accomplish that goal without an undue financial burden placed on you.