February 28, 2015
A reader asks, “My husband and I are trying to assume this fha loan. My debt to income ratio is too high. My mother in law will gladly co sign for us.”
“My husband will not be on the loan, just me. Is it possible for my mother in law to co sign with just me on the loan? I’ve called (LENDER NAME DELETED) (whom own the loan) I have gotten two different answers. One lady said yes and now the other today is saying no. I’m waiting on (LENDER NAME DELETED) to call back. I thought as long as it was blood, marriage, or law related they could “
Co-signers and non-occupying co-borrowers are permitted on FHA loans. Depending on the circumstances a non-occupying co-borrower or co-signer situation may require a higher down payment. But the main issue that affects how this question gets answered is whether or not the borrower lives in a community property state where certain laws would affect how the loan is processed.
Community property laws concern how a legally married couple share and enter into their debts. The reader asks if she can apply for the the loan with a co-signer without the spouse. This would be determined by any applicable community property laws in that state.
Not every state has community property laws, and the states that do have them don’t have identical laws–they vary from state to state and the borrower would need to check to see what might apply in this particular case.
Again, FHA loans do technically permit co-borrowers and co-signers. However, each loan circumstance is different and there are some instances where a higher down payment would be required, and some where no additional downpayment would be needed. Lender standards as well as FHA loan rules may be applicable, so the borrower would need to discuss these needs with the lender–it may be that other contributing factors affect the outcome of this loan application.
Do you have questions about FHA home loans? Ask us in the comments section. All questions and comments are held for moderation.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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