5. Non-Purchasing Spouses

Introduction

This topic contains information on non-purchasing spouses, including

•	valid first liens

•	non-purchasing spouse debt, and

•	non-purchasing spouse credit history.

Change Date

May 10, 2009

4155.1 4.A.5.a Valid First Liens

If required by state law in order to perfect a valid and enforceable first lien, the non-purchasing spouse may be required to sign either the security instrument or documentation indicating that the individual is relinquishing all rights to the property.

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: In all other cases, the non-purchasing spouse does not

•	appear on the security instrument, or

•	take title to the property at loan settlement.

4155.1 4.A.5.b Non-Purchasing Spouse Debt

Except for obligations specifically excluded by state law, the debts of non-purchasing spouses 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.

4155.1 4.A.5.c Non-Purchasing Spouse Credit History

The non-purchasing spouse's credit history is not considered a reason to deny credit. However, the non-purchasing spouse's credit report that complies with the requirements of HUD 4155.1 4.C.2 must be provided in order to determine the debt-to-income ratio.