A Decree That Awards You the House May Still Not Satisfy the Lender
Program and regulatory figures verified October 10, 2026. Details change; confirm your scenario with us.
This page exists because the fix costs nothing in a draft and costs a conversation with your former spouse's attorney after the fact.
The requirement, verbatim
Fannie Mae Selling Guide B2-1.3-02, immediately after the twelve-month condition:
"All parties must sign a written agreement that states the terms of the property transfer and the proposed disposition of the proceeds from the refinance transaction."
★★★ Two limbs, joined by and. Most divorce paperwork satisfies the first and overlooks the second.
★ Limb one: the terms of the property transfer
Who is transferring what interest, to whom. In a California dissolution this is ordinarily covered. It is the part everyone is already arguing about, and it ends up in the judgment or the marital settlement agreement.
★★★ Limb two: where the money goes
The proposed disposition of the proceeds from the refinance transaction. Not the equity in the abstract, the proceeds of this loan.
★★★ A judgment that says "the residence is awarded to Respondent" and stops has answered limb one and said nothing about limb two. A lender reading it has no document stating what happens to the money the refinance produces.
★★ What tends to work is language that connects the two: that the property is awarded to one party, that they will refinance, and that the proceeds will be applied to pay the other party a stated sum (or a sum determined by a stated method) in satisfaction of their interest. ★ We are not drafting it. That is your attorney's job and they will have their own form. We are telling you what the lender has to be able to read.
★★ "All parties" means the other side signs too
The agreement must be signed by all parties. In practice that means your former spouse signs a document about a loan that is not theirs and that they may feel no urgency about.
★★★ This is exactly why the timing matters. While the settlement is being negotiated, the other side is engaged, represented, and signing things anyway. Once everything is signed and everyone has moved on, obtaining one more signature can take weeks, and the leverage to ask for it is gone.
★★ So the entire content of this page reduces to a single piece of practical advice: raise it before the agreement is signed, not after.
★ What we ask for, so you can see it early
- The signed agreement or judgment covering both limbs above.
- The deed, which establishes the joint-ownership date for the twelve-month condition.
- Whether the property is being awarded to you, which engages the "no waiting period" on-title exception. That provision
- ★ Whether a stated sum or a method is used for the payment, since a method dependent on an appraisal can move.
★ Send them early and we will tell you what the financing still needs while there is time to put it in the draft.
★ What we will not do
- ★★ Draft it, review it as counsel, or tell you what to agree to. We are a lender. We are not a law firm, we do not represent you or your former spouse, and we take no position on how your property should be divided.
- ★ Recommend an attorney. We make no attorney referrals.
- Promise it will satisfy a particular lender. These are Fannie Mae requirements; individual lenders add overlays.
Mike Certo, NMLS #260555. (480) 296-6513 · mcerto@cfmtg.com. Verified against the Selling Guide 2026-10-10.
Frequently asked questions
Is a divorce decree enough for a buyout refinance?
Not necessarily. Fannie Mae Selling Guide B2-1.3-02 requires a written agreement signed by all parties stating both the terms of the property transfer and the proposed disposition of the proceeds from the refinance. A judgment that awards the house but says nothing about where the refinance money goes addresses only the first of those.Does my ex-spouse have to sign anything for my buyout refinance?
The guide requires that all parties sign the written agreement. That is far easier to obtain while the settlement is still being negotiated and both sides are represented than after everything has been signed and concluded.What should the agreement say about the refinance proceeds?
It needs to state the proposed disposition of the proceeds from the refinance transaction, not just the division of equity in the abstract. Language connecting the award of the property, the refinance and the payment of a stated sum or a sum determined by a stated method tends to satisfy it. Your attorney drafts it; we can tell you what the lender must be able to read.Can you review my marital settlement agreement?
No. We are a lender, not a law firm. We do not draft or review settlement documents as counsel, do not represent either party, and take no position on how property should be divided. We can tell you what the financing requires.Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about mortgage financing during and after a divorce. Not a loan commitment, and not legal, tax or financial advice. Cornerstone First Mortgage is a lender; it is not a law firm, does not represent any party to a dissolution, does not make attorney referrals, and takes no position on how property should be divided. California property-division rules are set by the Family Code and applied by the courts; the reassessment exclusion in Revenue and Taxation Code section 63 is administered by county assessors. Agency requirements described here are Fannie Mae Selling Guide provisions current as of the date shown and are subject to change and to lender overlays. Housing market figures describe the twelve months to August 2026 and are not a forecast. All loans are subject to borrower, property and program qualification.