TL;DR: Heirs selling a house with a reverse mortgage in Arkansas can pay off a balance higher than the home's value by selling for at least 95 percent of its appraised value, and have 30 days from the lender's due-and-payable notice to act (CFPB, Aug. 31, 2026). For an FHA-insured HECM, the lender has six months to begin foreclosure and may obtain up to two 90-day extensions from HUD while heirs actively market the home (24 CFR 206.125(d); HUD Mortgagee Letter 2015-10).
How does selling a house with a reverse mortgage in Arkansas work for heirs?
The Consumer Financial Protection Bureau (Ask CFPB, page last modified Aug. 31, 2026) says heirs have 30 days to buy, sell, or turn the home over to the lender to satisfy the debt, and that the timeline might be extended up to six months to allow a sale or a new loan. Selling is one of those three routes. The other two are buying the home yourself, which the extension also allows time for through a new loan, or handing the home to the lender.
For context on what Northwest Arkansas homes have sold for, the CBER Walton College Skyline Report for the first half of 2026, as reported by Talk Business & Politics on Aug. 21, 2026, put the average (not median) sale price at $465,888 in Benton County, down 1.2%, and $423,750 in Washington County, up 1.5% from $417,489 in the first half of 2025. Those are county averages. The appraisal on your own house is the number that matters for the payoff.
Bentonville, Rogers and Lowell are in Benton County. Fayetteville is in Washington County. If you are an heir, the clock starts with the lender's due-and-payable notice (24 CFR 206.125(a)(2)), so get the notice date, the servicer's name and the current payoff figure on paper in the first few days.
How much do heirs need to sell for if the balance is higher than the home's value?
The CFPB (Ask CFPB, page last modified Aug. 31, 2026) says heirs can pay off a reverse mortgage whose balance is higher than the home's value by selling the home for at least 95 percent of its appraised value. That makes the appraisal the number that sets your sale target, so the first document to request after the payoff letter is the appraisal the servicer is relying on.
HUD also publishes a program limit that is easy to confuse with that sale test. HUD set the 2026 HECM maximum claim amount at $1,249,125 for all areas, a single nationwide limit, and it applies to loans with FHA case numbers assigned on or after January 1, 2026 (HUD No. 25-145, release dated December 11, 2025). It is a limit on newer loans; it is not the 95 percent test and it does not set your sale price.
If you are an heir, that means you should get the payoff figure and the appraisal from the servicer in writing, then compare a realistic sale price for your house with 95 percent of that appraisal before you sign a listing agreement. If the two are close, ask the listing agent you interview to walk through recent sales near the house so the list price is grounded in the appraisal rather than in the county averages above.
How long do heirs have to sell a reverse mortgage house in Arkansas?
The starting point is 30 days from the due-and-payable notice. The CFPB (Ask CFPB, page last modified Aug. 31, 2026) says heirs have 30 days to buy, sell, or turn the home over to the lender, and that the timeline might be extended up to six months to allow a sale or a new loan. For an FHA-insured HECM, the lender must begin foreclosure within six months of the due date (24 CFR 206.125(d)(1)) and may request no more than two 90-day extensions from HUD while heirs actively market the home (HUD Mortgagee Letter 2015-10, Apr. 23, 2015). Ask the servicer in writing to request those extensions and to confirm each new end date.
Arkansas real estate rules also shape the timeline. A listing agreement must have a specific duration or expiration date under Arkansas Real Estate Commission rule 17 CAR 220-1002(a) (2026 AREC Rules), and a licensee must see that the exact agreement of the parties is in writing under 220-1009(a)(1). The rule requires a stated term; the length of that term, and any cancellation or protection period, come from the listing contract itself, usually an Arkansas REALTORS® Association form, not from the AREC rules. That means you can ask for a listing term that matches the servicer's confirmed deadline.
If you are an heir, the first week matters most: contact the servicer, request the extension terms in writing, and interview listing agents while most of the 30 days remain.
What does an Arkansas closing statement show for a reverse mortgage sale?
The closing statement lists the sale price, the payoff to the reverse mortgage servicer, and the other costs that come out of the proceeds. The payoff line should match the servicer's written payoff letter, so bring that letter to the review of the draft statement.
Arkansas adds a real property transfer tax of $3.30 per $1,000 of actual consideration on transfers over $100, made up of $1.10 under Ark. Code 26-60-105(a) and $2.20 under 26-60-105(b). Unless the parties agree otherwise, the seller and buyer each pay one-half (26-60-106(3)); exemptions are listed in 26-60-102 (as of 2026-10-24). To show the method on a figure from this article, take the Benton County first-half 2026 average of $465,888, which is an average and not your price. Round it up to the next whole $1,000: $466,000. Multiply: $466,000 x $3.30 / 1,000 = $1,537.80. Halve it: $768.90 for the seller's side. Run the same three steps on your own contract price.
Property tax also appears. Arkansas property is assessed according to its value on January 1 each year (Arkansas DFA Assessment Coordination Division; AG Op. 2017-067; accessed Oct. 29, 2026), and taxes on the previous year's assessment are collected from the first business day in March through October 15, with a 10 percent penalty plus costs and collector's fees after that (UAEX, Property Taxes in Arkansas; Ark. Code 26-35-501). A sale is reassessed at full value on the next January 1 under Act 2284 of 2005, so the buyer does not keep the decedent's Amendment 79 limitation, which can affect how buyers price the home.
If you are an heir, that means you should ask the closing agent for a draft statement early and confirm that any unpaid property tax is paid from the proceeds.
What Should You Do With These Numbers?
- Within days of the due-and-payable notice, ask the servicer for the notice date, the payoff figure and the appraisal in writing, because heirs have 30 days to buy, sell, or turn the home over to the lender (CFPB, Aug. 31, 2026).
- Ask the servicer in writing what it requires to extend the timeline and to request HUD's 90-day extensions while you actively market the home; the CFPB (Aug. 31, 2026) says the timeline might be extended up to six months, and HUD Mortgagee Letter 2015-10 allows the lender up to two 90-day extensions.
- Compare your expected sale price with 95 percent of the appraised value; if the balance is higher than the home's value, selling for at least that amount pays off the loan (CFPB, Aug. 31, 2026).
- Set the listing agreement's expiration date to fit the servicer's confirmed deadline, since 17 CAR 220-1002(a) (2026 AREC Rules) requires a specific duration and the contract sets its length.
- Review a draft closing statement for the payoff, the $3.30 per $1,000 transfer tax split (Ark. Code 26-60-105 and 26-60-106, as of 2026-10-24), and any property tax due by October 15.
Frequently Asked Questions
Can heirs sell a house with a reverse mortgage in Arkansas?
Yes, heirs can sell the home to satisfy the reverse mortgage. The Consumer Financial Protection Bureau (page last modified Aug. 31, 2026) says heirs have 30 days from the due-and-payable notice to buy, sell, or turn the home over to the lender, and that the timeline might be extended up to six months to allow a sale or a new loan. Ask the servicer for any extension in writing.
What is the 95 percent rule for a reverse mortgage sale?
The 95 percent rule lets heirs pay off a reverse mortgage balance that is higher than the home's value by selling the home for at least 95 percent of its appraised value (CFPB, page last modified Aug. 31, 2026). Ask the servicer for the appraisal it is using, because that appraisal sets the sale price you need to reach.
Can the 30-day deadline be extended?
Yes, the CFPB (page last modified Aug. 31, 2026) says the timeline might be extended up to six months so heirs can sell the home or obtain their own loan to buy it. For HECMs, HUD rules let the lender request up to two 90-day extensions beyond the six months when heirs document active marketing (HUD Mortgagee Letter 2015-10), so ask the servicer to request them in writing. Confirm the new end date before setting a listing term.
Who pays the Arkansas transfer tax when a reverse mortgage home sells?
Unless the parties agree otherwise, the seller and buyer each pay one-half of the Arkansas transfer tax (Ark. Code 26-60-106(3), as of 2026-10-24). The rate is $3.30 per $1,000 of actual consideration: round the price up to the next whole $1,000, multiply, then halve. Check the closing statement to see how your contract divides it.
For a first conversation, Mason Capital Group will prepare a timeline and net-proceeds estimate for your inherited or reverse-mortgaged home, built around the servicer's deadline, the payoff figure, the 95 percent of appraised value test and the transfer tax on your own price. Cameron Torabi, Principal Broker, Mason Capital Group Real Estate Investment & Trust, can be reached at 479-925-3333.
About the author: Cameron Torabi, Principal Broker — Mason Capital Group. 30+ years of Northwest Arkansas real estate expertise; $2.4B+ in cumulative transaction activity (estimated).
Figures in this article are drawn from the Consumer Financial Protection Bureau, Ask CFPB (page last modified Aug. 31, 2026); 24 CFR 206.125 (accessed Oct. 29, 2026); HUD Mortgagee Letter 2015-10 (Apr. 23, 2015); the HUD FHA 2026 loan limits announcement, HUD No. 25-145 (release dated December 11, 2025); the CBER Walton College Skyline Report for the first half of 2026 as reported by Talk Business & Politics (Aug. 21, 2026); Arkansas Code 26-60-105, 26-60-106 and 26-60-102 (as of 2026-10-24); Act 2284 of 2005; the Arkansas DFA Assessment Coordination Division and AG Op. 2017-067 (accessed Oct. 29, 2026); the University of Arkansas Cooperative Extension Service, Property Taxes in Arkansas (accessed Oct. 29, 2026); and the 2026 Arkansas Real Estate Commission Rules, 17 CAR 220.