Non-Recourse
A protection that limits the borrower or heirs' repayment obligation to the value of the home when the HECM becomes due.
Non-recourse is a key consumer protection in the HECM program. It generally means that when the loan becomes due and payable, the borrower or their estate is not personally liable for any amount above the home's appraised value at that time, even if the loan balance has grown larger than the home's worth.
Practically, this matters most when heirs need to repay the loan after the last borrower passes away or moves out permanently. If heirs choose to sell the home to repay the loan, they generally are not required to pay anything beyond the lesser of the loan balance or 95% of the appraised value, depending on circumstances and program rules.
Non-recourse does not remove the homeowner's responsibilities. The borrower must still maintain the property, pay property taxes and insurance, and meet other loan obligations while living in the home.
Related terms
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