Can a non-purchasing spouse or non-borrowing party with ownership sign the security instruments?

To be eligible, all occupying and non-occupying borrowers and co-borrowers must take title to the property in their own name or a Living Trust at settlement, be obligated on the Note or credit instrument, and sign all security instruments.  

In community property states, the borrower’s spouse is not required to be a borrower or a cosigner. However, the mortgage must be executed by all parties necessary to make the lien valid and enforceable under State Law. If necessary to perfect a valid first lien under state law, the lender must require a non-borrowing spouse to execute either the security instrument or documentation indicating that they are relinquishing all rights to the property. 

For additional information see Handbook 4000.1 II.A.1.b.ii.(A)(4); II.A.1.b.ii.(A)(13)(a) available at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.


Topic Number: KA-04737