Big news for California homeowners going through a divorce or legal separation. Starting with loans originated January 1, 2027 and beyond, California will require conventional lenders to allow the spouse who stays in the home to assume the mortgage when there is a court order dividing the debt. Until now, only FHA and VA loans were assumable.
Why it matters: Fannie Mae already lets the departing spouse omit a court-ordered debt, but the loan stays on their credit. If the spouse in the house misses a payment, the other person's credit takes the hit. And nobody with a 2% rate is refinancing into 7.5% just because a court said so. Under the new rule, the remaining spouse qualifies on their own, the loan comes off the ex's credit entirely, and the low rate stays with the house.
Hopefully the rest of the country takes notice.
Questions about your situation? Hit us up. We'll never divorce you at True Blue Lending.
---
Jesse Gonzalez | True Blue Lending Corporation
NMLS #278103 | Company NMLS #2380218
Phone: 707-583-3666
Web: truebluelending.net
