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FHA Question - Legally Separated in Community Property State

Member

FHA Question - Legally Separated in Community Property State

Hello - I have a question regarding FHA mortgages.  I live in a community property state (CA) and my husband has an existing house that is titled in his name only (had house for many years before me) that he is now upside down in by over $150,00.  We have now decided to separate.  I would like to buy my own house and was told by my realtor that I won't be able to get an FHA loan since he doesn't have enough equity in the house.  I was also told that I would have to list all his separate debts even though they are not joint accounts. Once I become legally separated how soon after that can I get an FHA loan to buy a house as my sole and separate residence?  I have searched all over the interent and cannot find the answer to this.  Thanks for your help.

Message 1 of 7
6 REPLIES
Senior Contributor

Re: FHA Question - Legally Separated in Community Property State


credit99 wrote:

Hello - I have a question regarding FHA mortgages.  I live in a community property state (CA) and my husband has an existing house that is titled in his name only (had house for many years before me) that he is now upside down in by over $150,00.  We have now decided to separate.  I would like to buy my own house and was told by my realtor that I won't be able to get an FHA loan since he doesn't have enough equity in the house.  I was also told that I would have to list all his separate debts even though they are not joint accounts. Once I become legally separated how soon after that can I get an FHA loan to buy a house as my sole and separate residence?  I have searched all over the interent and cannot find the answer to this.  Thanks for your help.


I'm not a lawyer, I believe the answer may well be that finances can only be completely separate when there is a final divorce decree, but you must talk to a lawyer in your jurisdiction immediately.

 

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Message 2 of 7
Established Contributor

Re: FHA Question - Legally Separated in Community Property State

I am in the same situation.  My boyfriend is legally separated.  He talked to his lawyer and the lawyer said community property ends on the date of separation as long as you are using separate funds (after separation).  HOWEVER, from what I keep hearing regarding FHA, that is not the case. Maybe with conventional it is different, which means 5% down at least. We are going to be talking to a LO in the next week and I will keep you posted. By the way, we are in CA as well.  You can send me an IM so we can K.I.T.

 

Thanks,

 

HappySmiley Happy


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Message 3 of 7
Super Contributor

Re: FHA Question - Legally Separated in Community Property State


happy0510 wrote:

  He talked to his lawyer and the lawyer said community property ends on the date of separation 

 

Thanks,

 

HappySmiley Happy

  

 
 Maybe for other legal reason, but not for loans.
 

 

Retired Lender
Message 4 of 7
Member

Re: FHA Question - Legally Separated in Community Property State

Dallas - Thank you for responding. Can you please tell us when it ends for loans, particularly, FHA loans? This information would be very helpful.  Thank you!
Message 5 of 7
Senior Contributor

Re: FHA Question - Legally Separated in Community Property State

It will end on the date of the Divorce Decree. *Some* situations can "end" on the date of the legal separation (usually admin type stuff -- like 401(k), certain types of bills, allotments, etc), but most end only with a valid Divorce Decree.

Why? Because all too many times, people will file for legal separation for the purpose of using a loophole (like with federal loans - student and housing) and then magically reconcile their differences later (AKA *after* they've exploited the loophole).

Not everyone does that (totally *not* saying that), but enough *have* that many agencies and entities have taken measures to circumvent that sort of fraud (which is exactly what it is at the end of the day).

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Message 6 of 7
Member

Re: FHA Question - Legally Separated in Community Property State

Thanks everyone for taking the time to answer my question.  I appreciate the information.
Message 7 of 7