My mom has a reverse mtg and is moving to asst living. What is the best way to handle her home?

Slow down--nobody can give you an answer on this forum w/ o a lot more facts. Amount of the reverse mortgage, amount necessary to restore the home in terms of maintenance, your mother's age and health are all individualized factors that must be taken into consideration as to which option is best for her specific circumstances. As to you as the POA being personally liable for any costs or debts on the home, the answer is "no", as long as you have demonstrated diligence in your fiduciary responsibilities to your mom. Let me suggest you spend the small consult fee a local elder law attorney might charge so you can get a detailed answer to your 1st question and make it a broader question--not about which option to pursue as to the home, but rather how to maximize her quality of life, to include long-term care planning and strategic Medicaid planning. Long answer to what was a seemingly short question and I apologize for that, but there's a lot unasked and unsaid in your query.

Those are good questions to be asking but it all boils down to simple math really. What is your time worth? How much equity can reasonably be generated if the house is sold? How long will it take to sell the home? What is the real estate market like there and is the neighborhood declining? Another question that may or may not apply in your state is whether your state Medicaid agency would consider it to be a bargain sale if you let either the lender or a short sale buyer have the house for less than FMV. Only an Elder Law attorney in your state can tell you for sure.