Is it possible to get out of a reverse mortgage due to a house being unhealthy to live in?

I'm not sure what you mean by "still have to pay back the reverse mortgage".  A reverse mortgage is non-recourse.  That means that the mortgage company has no recourse against your parents.  If you sell the house, or the can't sell the house and it gets condemned, the mortgage company cannot come back after your parents for any additional funds.  However, if you sell the house, and can pay off the mortgage, then you must do that.  I am currently working on several estates now in which the couple got a reverse mortgage when the housing market was high, and the amount that is owed is in excess of the value of the house.  There is a procedure by which you can offer the mortgage company the deed in lieu of them going through the process of foreclosure, and more or less walk away from the house.  The mortgage company may try to pressure you into paying off the mortgage, but you have no obligation to do so.  The mortgage is only secured by the value of the house, and nothing more.  If you have further questions, feel free to contact my office.