After your Grandfather has been in the facility for 12 consecutive months, the Reverse Mortgage will become due and payable and will need to be paid off with a lump sum. The Lender will not work with you to pay it off in monthly installments. If you qualify for VA financing, and would like to purchase the home, the best thing to do is purchase it now. Reverse Mortgages are negative amortization loans and every month equity is lost, so the sooner you purchase it, the less you'll have to pay the Reverse Mortgage Lender. And VA interest rates are at historic lows right now, so if I were you, I'd buy it now.
If your Grandfather comes home for a day, and then returns to the facility, the 12 months start all over again, beginning on the day he returned. During the time the Reverse Mortgage is in place, you can live in his house and pay it back monthly if you'd like. If you pay all of it back during the time he's in the facility, the Reverse Mortgage will cease, and your Grandfather won't have a lien on his property anymore, and then he'll be able to Quit Claim it to you. But that's probably an unlikely scenario, depending upon how much is owed and how much you can afford to pay.
I hope this information is helpful - wishing you success!