For property located in
community property States, we don’t pull credit and include liabilities for the
borrower’s non purchasing spouse, and we don’t have to. Where the subject
is in a community property State, you do. But, there’s a catch. If
a married non-occupant co-borrower lives in a community property state, even
though the subject property is not in a community property state, you do need
to pull the non-occupant borrower’s non purchasing spouse’s credit and also
include those liabilities in the debt to income ratios.
Here is a list of the 9 community property States:
Arizona.
California.
Idaho.
Louisiana.
Nevada.
New Mexico.
Texas.
Washington.
Wisconsin
Other things to know
In community property state the non borrowing spouse has to sign and be notarized that they acknowledge they are not part of the real estate transaction, for cash out refinance, for rate and term refinance or purchase transaction.
Marriage is a blanket over real estate in community property states. Do not assume that you can buy, sell or refinance without his or her verified signature. Lenders have ways to verify your marital status. Don' get stuck after you released contingency on a real estate transaction only to find you need your spouse to cooperate.
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