California is a community property state, so FHA loan guidelines require both spouses debt obligations to be included in the debt-to-income ratio calculations for FHA loan approval. So even if only one spouse is going on the FHA loan in California, both spouses credit reports must be pulled and all the debt obligations (car loans, mortgages, student loans, credit cards) of the non-borrowing spouse must be counted for approval. However, the credit quality of the non-borrowing spouse is not considered in teh decision for FHA loan approval. So if the non-borrowing spouse has a really low credit score, that is OK, it will not effect FHA loan approval, just the debts have to be counted.
So in some cases if you spouse has a really low FHA loan credit score, you may want to leave them off the loan in order for you to get a better FHA loan interest rate (or even qualify for the FHA at all). Of course you would still have to qualify with the income of only the one spouse that is on the FHA loan.
If you have any questions about getting approved for a FHA, conventional or VA loan in California, don’t hesitate to email me at homeloan8@gmail.com or call at 858-922-7899.
And here are some up-to-date advantages of FHA home loans in California:
- FHA loan rates are still near 60 year lows
- FHA loan limits in many California counties and cities such as San Francisco, Alameda, San Jose, Los Angeles, Orange County go up to $729,750 with only 3.5% down. FHA loan limits in San Diego County are very close to this.
- FHA loan down payment is only 3.5% and can be a gift from a relative
Regards,
Rob Chomentowski
Sr. Loan Officer (FHA, VA, USDA, Homepath and conventional loan specialist)
858-922-7899
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