Protecting the Younger Spouse
Before HUD's 2014 rule change, non-borrowing spouses under 62 were at risk
of losing the home when the borrowing spouse died. Today, protections
exist — but only if the loan qualifies.
HUD 2014/2021 Spouse Protections (MOE: Mortgagee Optional Election)
-
Non-borrowing spouse can remain in the home after borrowing spouse
dies — without repaying the loan
-
Must
have been married at loan origination AND remain married until
borrowing spouse's death
-
Spouse must continue paying property taxes, insurance, and
maintaining the home
-
Spouse cannot draw additional funds — line of credit freezes at the
borrower's death
Warning: Not All
Loans Qualify
Loans originated before August 4, 2014 may NOT include non-borrowing
spouse protections. Some lenders may not participate in the MOE program.
Always verify spouse protection eligibility before signing. Adding the
younger spouse as a co-borrower (if 62+) is the safest option.
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