The Quick Read: On an FHA cash-out refinance, the program does not decide whether your spouse signs. State law does. A spouse who is not on the loan may still have to sign the mortgage or deed of trust so the lien is valid, without becoming liable on the Note. The spouse’s debts can also count in your qualifying ratios in some states.
Key Takeaways
- Signing the lien document and owing the debt are two separate things.
- A non-borrowing spouse usually does not sign the Note. The spouse may still sign the security instrument if state law requires it.
- In community property states, the spouse’s debts can enter your debt-to-income ratio, except debts state law excludes.
- Leaving a spouse off the loan can hurt qualification, because the spouse’s income is not counted but the debts may be.
- An FHA cash-out reaches 80% LTV on a home you have owned and lived in for 12 months before the case number.
FHA cash-out estimate
Seeded with an example value, a balance to match, and a round cash request; change any field.
Editable benchmark: 7.40% as of October 15, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not an FHA cash-out refinance quote.
Illustrative starting assumptions: a $350,000 home value, a $193,000 current balance, the FHA cap on a principal residence with the upfront premium financed, a thirty-year term at the current Freddie Mac benchmark, and property taxes and insurance estimated at typical national rates. Every field is editable.
An illustration, not a Loan Estimate, an approval, a quote, or a commitment to lend. The rate shown is the weekly Freddie Mac thirty-year conventional benchmark, used as a market reference; an FHA cash-out is priced by the lender at lock, and this is not an FHA cash-out refinance quote. HUD’s cap limits the base loan; the upfront premium is financed on top of the capped base loan; the monthly premium for the first year follows the snapshot’s schedule. Cash available means the base loan the cap permits less the balances retired, before closing costs, which this calculator leaves out. The line figure applies the line program’s combined loan-to-value ceiling to the same value and balance. Taxes and insurance are estimates you can edit. Licensed in sixteen states for consumer mortgages.
What Does “High-Cost Closing States” Mean for FHA?
It is not an FHA term. HUD does not set signing rules by how expensive a closing is, and closing cost on its own does not determine whether a spouse has to sign.
The phrase is useful as shorthand. In practice, the states with heavier closings tend to be the ones where marital-property law, homestead protection, or attorney and title-driven settlement shape the file. Those same factors decide who signs.
HUD’s FHA answer page says that in a community property state the spouse does not have to be a borrower or co-signer. It also says the mortgage must be executed by every party needed to make the lien valid and enforceable under state law. Those two sentences are the whole framework. The rest of this article is mechanics.
Who Signs What on an FHA Cash-Out?
The Note is the promise to repay. The security instrument (a mortgage or deed of trust) puts the lien on the house. Different people can sign each one.
| Person | Signs the Note? | Signs the lien document? | Counts in ratios? |
|---|---|---|---|
| Borrower | Yes | Yes | Income and debts |
| Co-borrower | Yes | Yes, if on title | Income and debts |
| Non-borrowing spouse | No | Often, if state law requires | Debts, in some states |
| Co-signer | Yes | No ownership, so no | Per file |
HUD’s page says co-signers sign the Note but not the security instrument, because they hold no ownership interest. A spouse who owns an interest in the home is the mirror image. The spouse signs the lien document and stays off the Note.
Why Does the Spouse Sign the Lien If Not on the Loan?
The lender needs the house to be available to satisfy the debt if the loan defaults. If a spouse holds marital or homestead rights in the property, the lien may not be valid without that spouse’s signature. The title company will not insure a defective lien, and the lender will not fund against one.
That is why this is a property matter, not a credit matter. The spouse is not promising to pay. The spouse is agreeing that the lien attaches to the home, rights included.
Federal fair-lending rules back this split. Under the CFPB’s Regulation B commentary, a lender may not require a spouse to sign the Note if signing only the mortgage or security agreement is enough. A lender can ask for the signatures that state law makes necessary to make the property available on default. It cannot demand a spouse’s name on the debt when the applicant qualifies alone.
How Is an FHA Cash-Out With a Non-Borrowing Spouse Underwritten?
Here is how a file runs, step by step. Every program figure below is subject to lender guidelines and full file review, and nothing here is a commitment to lend.
1. Eligibility screen. For a cash-out, the home must be owned and lived in as your principal residence for 12 months before the case number is assigned. Payment history on the existing mortgage is reviewed too.
2. Leverage. An FHA cash-out reaches 80% LTV. HUD lowered the cash-out cap to 80% of the property’s adjusted value, so at least 20% equity stays in the home after the cash-out. Older material quoting a higher cap is out of date. County loan limits apply as a second ceiling, and the lower one controls. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
3. Application. The borrower applies. The spouse’s status is disclosed up front: married, on title or not, and whether the home is in a community property state.
4. Spouse credit report. In a community property state, or when the property sits in one, the lender pulls a credit report on the non-borrowing spouse. The report is used to find debts. It is not scored, and the spouse’s credit history is not a reason to deny the loan.
5. Debt treatment. The lender documents the spouse’s debts and counts them in your ratios. Debts excluded by state law are the exception, and the file must note the specific law that justifies the exclusion.
6. Appraisal. The appraisal sets value, which drives the 80% cap. It does not change who signs.
7. Title review. The title company or closing agent confirms the vesting and which signatures state law requires.
8. Signing. The borrower signs the Note and the security instrument. The spouse signs the security instrument and any state-required documents, but not the Note.
Across the wholesale programs Lendmire places FHA files with, the usual breakdown comes at the title stage, before signing. The title company asks for a signature the file did not plan for. Raising the spouse question at application, not at the closing table, keeps that from turning into a rewrite of the closing package.
Why Can Leaving the Spouse Off the Loan Hurt?
The spouse’s income cannot be used if the spouse is off the loan. The spouse’s debts, though, can still count in a community property state. FHA industry commentary quoting HUD’s handbook language puts it this way: debts of a non-borrowing spouse go into the borrower’s qualifying ratios if the borrower lives in, or the property is in, a community property state. Debts excluded by state law are the exception.
So a spouse with a car loan and a student loan can add weight to your ratio without adding a dollar of income. The base FHA ratio pair is 31/43 (housing to total) with no compensating factors. Documented compensating factors can reach 40/50 at the top tier, and the automated finding governs most files. Because the commentary is secondhand, the current HUD Handbook 4000.1 text is the authority on exact wording.
Picture a married couple where one spouse earns the income and the other carries a large installment debt. Putting the earning spouse alone on the loan keeps the Note simple. It does not remove the other spouse’s debt from the ratio if the state follows the community property rule. Sometimes adding the second spouse as a borrower is the cleaner structure, because the income comes with the debt. Which route wins depends on the numbers, not on a rule of thumb.
Which States Trigger Spouse Signatures?
Two separate triggers matter. They do not always point to the same states.
USDA’s credit requirements list nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Alaska is an opt-in state, and Puerto Rico also allows community property. That list is a good starting point for the debt rule.
The signature question reaches further. Homestead protection, dower or curtesy rights, and other marital-rights laws in non-community-property states can also require a spouse to sign the lien document. Do not treat the community property list as the full map.
| Trigger | What it affects | Typical document |
|---|---|---|
| Community property | Spouse’s debts in ratios; spouse’s interest in the home | Security instrument signed by spouse |
| Homestead protection | Validity of the lien on a primary home | Security instrument or waiver, per state |
| Marital-rights laws | Spouse’s claim on title | Joinder or release, per state |
Some wholesale summaries add state-specific handling. The details vary by lender, so ask your loan officer how it applies to your file.
Why Cash-Out Is Different From a Purchase
On a purchase, the spouse is often on the deed from day one and signs as an owner. On a cash-out refinance, you already own the home. The question becomes whether the spouse’s rights attach to the new lien, and who holds title now.
Proceeds add one more wrinkle. The cash goes to the borrower on the Note. A spouse who is not on the loan signs the lien but is not a payee on the debt. If the household treats the equity as shared, that is a conversation to have before closing. It is not a federal rule.
Occupancy matters too. FHA cash-out is for a home you live in. If the property is a rental or second home, occupancy decides leverage, and this program is not the fit.
Roles That Get Confused
Lenders and borrowers mix these up. They differ in ownership and Note liability.
| Role | Owns the home? | Liable on the Note? |
|---|---|---|
| Co-borrower | Yes | Yes |
| Co-mortgagor | Yes, on title | Often yes |
| Co-signer | No | Yes |
| Non-borrowing spouse | Possibly, by marital right | No |
A non-occupant co-borrower is allowed on FHA purchases. Older HUD material limited non-occupant co-borrowers on cash-out refinances, but that text is retired. Check current guidelines before assuming either way.
Where the General Rule Breaks
The “spouse signs the lien, not the Note” rule has edges.
Debts excluded by state law. The exclusion is not automatic. The file needs a note naming the state law. Whether any debt qualifies varies by state.
Ex-spouse buyouts. Refinancing to buy out an ex-spouse follows its own handling. The divorce decree and title position drive the paperwork. Plan this one with your loan officer before you apply.
Inherited homes. An inherited home can count toward the 12-month occupancy rule only if it was never treated as an investment property. Renting it after inheritance restarts the clock.
Other programs. USDA treats a non-purchasing spouse in a similar way. Debts count in the total debt ratio, and credit history is not a basis to deny. Conventional loans are generally described as not applying the community property debt rule, though that comes from industry commentary and not an agency text. Do not assume one program’s treatment carries over to another.
Handbook changes. Agencies revise handbooks. Quotes from secondary sources, including the ones used here, should be checked against the current Handbook 4000.1 on hud.gov.
Common Mistakes
- Assuming “off the loan” means “off the file.” The spouse’s debts can still count.
- Assuming a signed deed of trust makes the spouse a borrower. It does not. Signing the lien is different from owing the debt.
- Assuming a lender can demand the Note signature. If you qualify alone, federal rules generally say it cannot.
- Assuming the spouse’s bad credit sinks the loan. HUD says the spouse’s credit history is not a reason to deny. The debts still count in the ratios.
- Assuming closing costs change the rule. State law decides signatures.
- Planning a closing without the spouse in the room. The spouse still has to be there, or arrange a notarized signing, so ask your closing agent early.
What the Closing Looks Like
At the table, the borrower signs the Note and security instrument. The non-borrowing spouse signs the security instrument and the documents state law calls for. The spouse also signs the borrower’s certification in community property states, and a Social Security verification form when an SSN is on the credit report, per the wholesale summaries Lendmire works with.
If the spouse is out of state, the closing agent can often arrange a notary elsewhere. A power of attorney has limits and not every title company accepts one for a lien document, so ask first. If the spouse refuses to sign where state law requires it, the lien cannot be perfected and the loan does not move forward. Divorce and separation change who must sign, so disclose them at application.
Questions to settle before you apply:
1. Is the home in a community property state, or does a homestead or marital-rights law apply?
2. Who is on title, and how is it vested?
3. Does the spouse carry debts that will enter the ratios?
4. Which signatures will the title company require?
5. Can the spouse attend the signing, or does a remote option need approval?
If the state also has its own fee rules, Lendmire’s piece Texas FHA Cash-Out Fee Cap Rules for High-Cost Closing States covers that side. Borrowers weighing a larger loan can read about jumbo cash-out requirements in high-cost closing states.
Key Terms Defined
Note: The signed promise to repay the loan. Anyone who signs it is liable for the debt.
Security instrument: The mortgage or deed of trust that puts a lien on the home as collateral.
Non-borrowing spouse: A spouse who is not on the loan but may have marital or ownership rights in the home.
Community property state: A state where property and debts acquired during marriage are generally treated as shared.
Homestead protection: A state law that shields a primary home from some claims and can require spousal signatures on a lien.
Joinder: A spouse’s signature that joins the lien document so the lien is valid.
Adjusted value: The property value HUD uses for the 80% cash-out cap. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
Where Lendmire Fits
The FHA cash-out refinance program is one of several options Lendmire arranges through wholesale lenders. The wholesale programs Lendmire places FHA loans with start at a 580 decision score for FHA purchase, and file-level guidelines apply to a cash-out. Lendmire brokers the loan. It does not lend.
The upfront mortgage insurance premium on FHA is 1.75% of the base loan and can be financed. The annual premium depends on term, loan amount, and LTV. On a thirty-year loan above 90% LTV, the annual premium lasts for the term. Both are program facts, not prices.
Frequently Asked Questions
Does my spouse have to sign my FHA cash-out loan if they are not on it?
Only if state law requires it. In many states a spouse with marital or homestead rights signs the security instrument so the lien is valid, but does not sign the Note. Your title company confirms which signatures your state requires.
Does signing the deed of trust make my spouse responsible for the debt?
No. Signing the security instrument is separate from signing the Note. The spouse is agreeing that the lien attaches to the home, not promising to repay. Under federal fair-lending rules, a lender generally cannot require the Note signature when you qualify alone.
Will my spouse’s debts hurt my FHA cash-out approval?
Yes, they can. In a community property state, a non-borrowing spouse’s debts can count in your qualifying ratios, except debts that state law excludes. The spouse’s credit history by itself is not a reason to deny. Review and approval are subject to lender guidelines and full file review.
Is the 80% limit different if my spouse is on the loan?
No. The FHA cash-out cap is 80% LTV on the property’s adjusted value whether the spouse is a borrower or not. The spouse’s role affects signatures and ratios, not the leverage cap. County loan limits apply as a separate ceiling. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
Which states are community property states?
USDA lists Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Alaska is opt-in, and Puerto Rico also allows community property. Homestead and marital-rights laws in other states can also require signatures.
Your Next Step
If you are weighing a cash-out refinance against keeping the loan you have, Lendmire can help you compare the programs and the equity each one reaches. Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit. Whatever your state, the rule that holds is simple: the lien needs the right signatures, and the Note needs only the people who owe the debt.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker licensed for consumer lending in 16 states. Lendmire arranges FHA, VA, conventional and jumbo purchase and refinance loans through wholesale lenders; every file is underwritten by the lender under the applicable program guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
For the program’s current guidelines, see FHA loan programs.
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References
1. HUD FHA Q&A: Co-Borrowers and Co-signers
2. CFPB Regulation B commentary on spousal signatures
3. HUD Archives: FHA cash-out maximum LTV change
4. FHA News and Views: FHA loans in community property states
5. USDA Rural Development: SFH Credit Requirements
This article is part of Lendmire’s FHA Loan series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: FHA Cash-Out Appraisal Rules for a Condo Unit · Conventional Cash-Out vs FHA Cash-Out on a Condo · Can You Finance All FHA Cash-Out Closing Costs?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.