Many times, when I am consulting couples, an spouse might request NOT to be added in the loan because his or her credit is shot.  In response, I have to inform them that Ca is a community property state. In other words, even though the spouse will not be in the loan, FHA will  require to look at the spouse’s credit and consider his or her debt in order for you to qualify .

According  to FHA underwriting guideline manual 4155.1

• The debts of nonpurchasing spouses must be included in the borrower’s qualifying ratios. If the borrower resides in a community property state (such as CA), 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 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 total debt and qualifying ratio. For example, let say that your credit debt is $300.00 per month and your non-purchasing spouse’s debt is $900.00 per month. Under FHA guidelines, the total debt that will be consider is $ 1,200.00. This could mean the differnce between qualifying  for $100,000 or $300,000 house.

If you want to use FHA due to all the advantages that it offers such as low down payment, fixed rates and lower credit score requirements, but you do not want to add a spouse to the loan due to his or her credit issues, you need to consult a mortgage professional that knows FHA guidelines.  In this day and age, couples are being told that they qualify for an FHA loan but the ” individual doing the qualfication” does not known FHA guidelines.  A mistake, such as not knowing that FHA will require a non-purchasing spouse’s credit to be examined, can cost you thousands of dollars and leave you without the dream of owning a home.

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