I am legally separated from my husband, but our divorce isn't final. Is my husband required to be on the loan?

Short answer: no, he doesn't have to be a borrower. But he doesn't disappear from the loan, either.

As long as you're legally married, HUD treats your husband as a non-borrowing spouse on a HECM, even if you've been separated for years. That's a question I get more often than you'd think, so here's how it works.

Why your spouse still counts while you're separated

HUD's rules look at whether you're legally married, not whether you live together. Until a court finalizes your divorce, you're married in the eyes of the loan. Every married HECM applicant has to identify their spouse, and that spouse is either a borrower or a non-borrowing spouse.

You don't need him to sign the loan as a borrower. But he will generally be named in the loan file.

Eligible or ineligible?

There are two kinds of non-borrowing spouse, and the difference comes down to a few requirements, the biggest being where the spouse lives.

• An eligible non-borrowing spouse lives in the home as their primary residence and meets HUD's other requirements. They can generally stay in the home after the borrower dies, under what HUD calls the deferral period.
• An ineligible non-borrowing spouse is identified at closing but doesn't meet those requirements. The most common reason is that they don't live in the home.

If your husband has moved out, he would generally be an ineligible non-borrowing spouse.

What that means for your loan

Being ineligible has two effects.

First, his age isn't used to figure your loan amount. A HECM's available money is based partly on age. If your husband were eligible, his age would be used, and if he's younger than you, that would lower the amount. As an ineligible spouse, only your age counts. That can mean more money available to you.

Second, he has no right to stay in the home after you're gone. He wouldn't get the deferral period. When the loan comes due, it would be handled the normal way, by you or your heirs.

For the full rules, see the Non-Borrowing Spouse guide and What is an ineligible non-borrowing spouse?

Does he have to go to counseling?

HUD's counseling rules require non-borrowing spouses to receive counseling along with the borrower. In a separation, that can be awkward. If your husband won't cooperate, tell your loan officer early, so we can find out how the counselor and the lender handle it.

Title and paperwork

If your husband is still on title to the home, things get more complicated. A HECM borrower generally has to hold title, and anyone on title who isn't a borrower may need to sign documents or be removed from title. State law matters too. Community property states, including several where we work, can have their own rules about what a spouse must sign.

This is where your divorce attorney and your loan officer need to talk.

Should you wait until the divorce is final?

Sometimes, yes. Here's how I think about it:

• If the divorce will be final soon, waiting can make things cleaner. Once it's final and the home is awarded to you, your ex-husband isn't part of the loan at all.
• If you need the money now, or the divorce will drag on, applying as a married borrower with an ineligible non-borrowing spouse can work, as long as title and paperwork line up.
• If the reverse mortgage is part of the settlement, for example to buy out his share of the home, the decree's wording matters a great deal. See Divorce After 60: Keep the House With No New Monthly Payment.

There are no required monthly mortgage payments on a reverse mortgage. You must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms.

Related questions

• What is an eligible non-borrowing spouse?
• How does an eligible non-borrowing spouse qualify for the deferral period?
• Who must attend counseling?

Every separation is different. Call us at 530-888-6000 and we'll walk through your situation, and how the timing affects your options, before you apply.