One of the most commonly asked questions about FHA home loans is whether or not a spouse is required to sign, co-sign, or otherwise be committed to an FHA home loan. Can one spouse by a home with an FHA insured mortgage without participation of the other?
That depends greatly on state law. FHA loan rules cannot and do not override state laws, but there are clauses found in the FHA loan rules written in HUD 4155.1 that address this issue. These items are found in Chapter Four, Section A under a section titled Non-Purchasing Spouses. It says in part;
“If required by state law in order to perfect a valid and enforceable first lien, a non-purchasing spouse may be required to sign either the security instrument or documentation indicating that he/she is relinquishing all rights to the property.”
However, according to Chapter Four, “When the security instrument is executed for this reason, the non-purchasing spouse is
• not considered a borrower, and
• not required to sign the loan application.
Note: Non-applicant individuals can have an ownership interest in the property at the time of settlement without executing the mortgage note and security instrument, regardless of whether the transaction is a purchase or a refinance.”
Community property states, where the law requires both spouses to share equally in the debts created as part of the marriage relationship, may require both spouses to commit to the FHA loan. In such cases, FHA loan rules in Chapter Four state:
“Except for obligations specifically excluded by state law, the debts of the non-purchasing spouse must be included in the borrower’s qualifying ratios, if the
• borrower resides in a community property state, or
• property being insured is located in a community property state.
The non-purchasing spouse’s credit history is not considered a reason to deny a loan application. However, the non-purchasing spouse’s obligations must be considered in the debt-to-income (DTI) ratio unless excluded by state law.”
For assistance with community property laws or issues surrounding non-purchasing spouse requirements, contact the FHA at 1-800 CALL FHA or speak to a loan officer about your specific needs.
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