How Community Property Debts – Affect Home Loans

Mortgage and Lending with Strategic Mortgage NMLS#160440

Arizona is a community property state and because of that reason, there are different lending standards for certain home loans.


In this article, we will address the common home loans and how they are affected by a community property state.


FHA & VA Home Loans


When using a VA or FHA home loan to purchase or refinance a home, if you are married, then your spouse’s debts count against you for qualifying purposes, whether or not they are listed on your loan application. That means that any monthly payment that appear on either spouse’s credit report count as a debt, even if only one spouse is on the loan application.


Furthermore, if your spouse is not on your home loan application, then you are also not allowed to use any income they earn as well.


However, there is one important caveat in the state of Arizona as well. If you can prove any of the debt in a spouse’s name was obtained solely before a marriage, then those debts can potentially be excluded from being counted.


            For example, if a couple recently married and either the husband or wife has a large amount of student loans obtained prior to the marriage, you may be able to exclude all of that student loan debt.


            Items such as credit cards are more difficult to prove, since the cards could have been opened prior to being married, but the debts could have been obtained after the marriage. However, when it comes to installment loans like student loans, auto loans any other consumer loans, then it is much easier to prove an origination date.


Conventional Home Loans


            On a conventional home loan, if one spouse obtains a home loan solely in their name, then any debt solely in the name of the other spouse does not need to be counted against them.


            However, if you are married and purchase a property solely in your name and your spouse will not be on the mortgage note or deed to the new property, then they must sign a disclaimer deed at the closing of the home purchase, to disclaim any interest in the property.


Jumbo Home Loans


            Jumbo home loans generally follow the same rules as do conventional loans above, but since Jumbo loans all have different guidelines, based on individual lender standards, it is always best to speak with a lender directly about how they address community property debts.


            As always, it’s best to speak to a licensed lender who can properly assess your entire situation, but when it comes to the community property debt rules in Arizona, it’s important to know the basics, before applying for a home loan.


For more information on current home loan programs and options for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: or online at 

Strategic Mortgage, LLC - NMLS#158804- Equal Housing Lender – AZBK#0909514

Vasilios Bill Kamboukos Jr – NMLS#160440


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Kristin Johnston - REALTOR®
RE/MAX Realty Center - Waukesha, WI
Giving Back With Each Home Sold!

Great information! THanks for sharing and have a successful week!

Feb 19, 2018 07:10 AM #1
William Feela
Realtor, Whispering Pines Realty 651-674-5999 No.

Many things can affect the cost.  You have listed them very well

Feb 19, 2018 09:05 AM #2
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