October 25, 2011
One FHA loan frequently asked question relates to married FHA borrowers with non-purchasing or non-occupying spouses. When an FHA borrower applies for a loan and the spouse does not co-sign or co-borrower, are there situations where the spouse could be required to sign the loan?
According to FHA loan rules, this issue depends greatly on state law. The FHA itself has no requirement for a non-borrowing spouse to sign, but states which require certain types of documentation for “valid and enforceable” loans could need a signature from the non-borrowing spouse. But what kind of signature?
In these cases, the state law usually requires a signature to indicate the non-borrowing spouse’s status in connection with the loan. The non-borrower isn’t obligated by law to become financially responsible–just to state they are or are not co-borrowers where applicable.
The FHA official site says, “If required by state law in order to perfect a valid and enforceable first lien, the non-purchasing spouse or non-borrowing party with ownership interest in the property may be required to sign either the security instrument or documentation indicating that the individual is either…relinquishing all rights to the property or retaining an ownership interest in the property (when the purchasing/borrowing party is applying for the loan and credit qualifies for the loan on his or her own).”
Anyone who becomes a co-borrower on the FHA the loan must submit credit and employment data the same as the primary borrower. If a non-purchasing spouse changes his or her mind and wants to become part of the loan, the application must be revised to include the new borrower’s data for verification in the usual ways.
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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