A spousal buyout refinance lets one spouse keep the home after a divorce. A new mortgage in the keeping spouse’s name alone pays off the old loan and, in most cases, covers the other spouse’s share of the equity, so the former spouse can come off the loan. Title is typically handled separately, by deed, and your attorney and title company can explain that step. This guide explains how it works in Florida, what FHA, VA and conventional programs generally allow, and how to prepare so the timing works.
Every divorce is different, so use this guide as a starting point for a conversation with a lender, and talk to a Florida family law attorney about your settlement. For the wider picture, see our overview of refinance options in Florida.
Keeping the Home After a Divorce?
Greg Hayden can review the home value, mortgage balance, divorce terms and your income, explain which refinance options may fit, and compare options from more than 25 wholesale lenders.
What a Spousal Buyout Refinance Does
When a couple owns a home together, the divorce settlement or court order decides who keeps it and what the other spouse is owed for their share of the equity. A refinance turns that agreement into financing. The new loan pays off the existing mortgage and funds the payment to the departing spouse, and the lender records a new mortgage in the keeping spouse’s name.
The refinance matters because a divorce order generally divides responsibility between the two of you, but the lender is not bound by it. Your former spouse often stays liable on the original loan until it is paid off or the lender agrees to a change. In most cases the practical route is a refinance in your name alone, although you can ask your current servicer whether it offers alternatives.
Florida Divorce Basics That Affect the Buyout
Under Florida Statute 61.075, Florida courts begin with the presumption that marital assets and liabilities should be divided equally, and they may depart from that based on the circumstances. The statute allows the court to order a monetary payment, in a lump sum or in installments, to equalize a division. It also allows the court to consider keeping the marital home for a dependent child when that is equitable and financially feasible. The statute sets a cut-off date for identifying marital assets and lets the court choose the valuation date it finds just and equitable.
What this means for a refinance: the agreement or order, not the lender, decides the payout amount, and the lender will want to see it. Because the amount owed is often a share of the home’s equity, the home value and the existing mortgage balance matter early. This article is general information, not legal advice. Your attorney can explain how these rules apply to your case.
Buyout Refinance Options at a Glance
| Option | How it can work | Key points |
|---|---|---|
| Conventional: buyout as a limited cash-out refinance | Fannie Mae treats a buyout required by a divorce settlement as a limited cash-out refinance when the property was jointly owned for at least 12 months. | All parties sign a written agreement on the transfer and the use of the proceeds. The spouse buying out the other must qualify under Fannie Mae guidelines, and the spouse who becomes sole owner generally cannot take cash proceeds. |
| Conventional: cash-out refinance | Used when you need cash beyond the payoff and the buyout. | At least one borrower generally must have been on title for six months, but no waiting period applies if you were legally awarded the property in a divorce. Loan-to-value limits come from Fannie Mae’s eligibility matrix. |
| FHA: rate and term (no cash out) | HUD allows the ex-spouse’s equity to be included in the new mortgage amount. | For a principal residence or HUD-approved second home. The maximum loan-to-value is 97.75% if you have lived there for the previous 12 months, and 85% if less. The lender needs the divorce decree, settlement agreement or other legally enforceable equity agreement. |
| FHA: cash-out refinance | A cash-out refinance when you need more than the payoff and buyout. | Maximum loan-to-value and combined loan-to-value of 80% of adjusted value. At least one borrower must have owned and lived in the home as a principal residence for the 12 months before the case number, and mortgage payments must have been on time for the previous 12 months. |
| VA: cash-out refinance | An eligible Veteran who keeps the home can refinance and take cash to pay the former spouse. | The loan may go up to 100% of VA’s reasonable value, including the funding fee. VA does not limit how a Veteran uses cash proceeds, and the Veteran must intend to live in the home. |
| VA: interest rate reduction refinance (IRRRL) | Only refinances an existing VA loan and cannot take equity out. | After a divorce, the Veteran alone can generally refinance with an IRRRL. A divorced spouse who is not the Veteran cannot, unless the Veteran stays obligated and commits entitlement. An IRRRL cannot pay an ex-spouse’s equity. |
These summaries come from the Fannie Mae Selling Guide on limited cash-out refinances and cash-out refinances, HUD Handbook 4000.1 (section II.A.8.d.vi(A), on refinancing to buy out title-holder equity) and HUD’s FHA answers on rate and term refinances and cash-out refinances, and Chapter 6 of VA’s Lender’s Handbook. Individual lenders can apply stricter rules, and program rules change. These are general summaries, not a decision about your application.
Qualifying on One Income
The biggest question is usually whether you can qualify alone. A lender looks at your income, debts, credit and the new payment on your own, without the former spouse’s income. Our guide to mortgage pre-approvals in Florida explains how lenders review a file.
If you receive alimony or child support, it may count as income, with documentation. Fannie Mae asks for the divorce decree, separation agreement or other legal document showing the amount, receipt for the most recent six months, and evidence that the payments will continue for at least three years. It does not treat lump-sum equalization payments as steady income. For FHA, HUD asks for the final decree, legal separation agreement or court order, evidence of receipt for the most recent three months when payments are court-ordered, and evidence that they will continue for at least three years. See Fannie Mae’s rules on support as income and HUD’s answer on child support and alimony as income.
Support you pay can also affect approval. Under Fannie Mae guidelines, alimony, child support, equalization and separate maintenance payments generally count as monthly debt when more than ten months remain. For alimony, equalization and separate maintenance, the lender may instead reduce your qualifying income by the payment. See Fannie Mae’s monthly debt obligations rules. Ask your lender how your obligations are counted.
Timing, Title and Mortgage Payments
Timing is where many buyouts run into trouble. Conventional guidelines look at how long the home was jointly owned and how long a borrower has been on title. FHA looks at how long a borrower has owned and lived in the home. Payment history matters too. For an FHA cash-out refinance, HUD requires all mortgage payments to have been made within the month due for the previous 12 months. For an FHA rate and term refinance that is manually underwritten, HUD looks at the six months before the case number, with no more than one 30-day late payment. If the mortgage is not in your name, the FHA lender needs a verification of mortgage, bank statements or other documents showing payments were made on time.
Talk to your lender before you sign settlement terms or a deed that depend on a refinance. A short conversation can show which loan type fits, whether your dates work and what the lender needs from the agreement. Our guide to cash-out refinancing in Florida and our comparison of a HELOC versus a cash-out refinance cover the choices if you need to raise money. If you are comparing government-backed options, see FHA loan requirements in Florida and VA loan eligibility.
Documents to Gather
- Your divorce paperwork: the marital settlement agreement, final judgment or the current draft, showing who keeps the home and what is owed to the other spouse.
- Your mortgage information: a recent statement, the current balance and payment history, and details of any second mortgage or HELOC.
- Title and property details: the deed, property tax bill, homeowners insurance and any HOA or condo information.
- Income documents: pay stubs, W-2s and tax returns, or business records if you are self-employed.
- Support documents: the order or agreement for any alimony or child support you receive or pay, and bank statements showing receipt.
- Debts and assets: credit card and loan statements, plus bank statements for the funds you will use for closing.
What If You Cannot Qualify Alone?
If the numbers do not work yet, you have choices to discuss with your attorney and lender. Waiting until you have a longer income or support-payment history, paying down debt, changing the loan program, or restructuring the settlement may help. Some non-QM lenders may offer other ways to qualify, depending on the borrower, the property and lender guidelines. Terms and availability vary. Mortgages Done Right can check current lender options for the specific scenario.
Frequently Asked Questions About Refinancing to Buy Out a Spouse
Do I have to refinance to take my spouse off the mortgage?
Often, yes. A divorce order or deed can change ownership or responsibility between the spouses, but it generally does not release a borrower from the existing mortgage obligation. Refinancing into one spouse’s name is a common way to remove the other borrower, although the current servicer may offer other options in some cases.
Can I get cash out of the home to pay my spouse?
Yes, within program limits. A conventional buyout can be treated as a limited cash-out refinance, FHA allows ex-spouse equity to be included in a rate and term refinance, and FHA and conventional cash-out refinances are also available. A VA cash-out refinance may be an option for eligible Veterans. Loan-to-value limits and the amount you can borrow depend on the program and your appraisal.
How soon after the divorce can I refinance?
It depends on the program and how the property is titled. Fannie Mae’s cash-out rules do not apply a six-month ownership waiting period when the borrower was legally awarded the property in a divorce, and a conventional buyout generally requires the home to have been jointly owned for at least 12 months. FHA cash-out refinances require a borrower to have owned and lived in the home for 12 months. Check your dates with a lender before you plan.
Does alimony or child support count as income?
It can, with documentation. Fannie Mae asks for the legal document, six months of receipt and at least three years of continuance. HUD asks for the decree or order, recent receipt and at least three years of continuance for FHA loans. Lump-sum equalization payments are not treated as steady income under Fannie Mae guidelines.
Will alimony or child support I pay count against me?
Often, yes. Under Fannie Mae guidelines, these payments generally count as monthly debt when more than ten months remain, or for alimony the lender may reduce qualifying income by the payment instead. Your lender will ask for the order or agreement that shows the amount.
Who decides how much my spouse is paid?
The settlement or the court decides the payout, not the lender. The lender’s appraisal sets the value used for loan limits, so a gap between the value you and your spouse agreed on and the appraised value can affect how much you can borrow. Raise this early with your attorney and your lender.
Can I use a VA loan to buy out my ex-spouse?
If you are an eligible Veteran who is keeping the home, a VA cash-out refinance may be possible, because VA does not limit how a Veteran uses cash proceeds. A VA interest rate reduction refinance cannot take equity out, so it cannot pay an ex-spouse’s share. A non-Veteran spouse who keeps the home generally cannot refinance into a VA loan on their own unless they have their own VA entitlement.
Talk Through Your Buyout With Greg Hayden
Bring your settlement terms or draft agreement, your current mortgage statement and your income documents. A quick review can show whether you may qualify to keep the home on your own and what to line up first.
Program rules were checked against the Fannie Mae Selling Guide, HUD Handbook 4000.1, HUD FHA Resource Center guidance, VA Lender’s Handbook Chapter 6 and Florida Statute 61.075 in October 2026 and can change. Eligibility, loan limits and timing depend on your lender, property, credit, income and divorce terms. This article is for general education and is not legal, tax or financial advice, a rate quote, loan approval or commitment to lend. Talk to a Florida family law attorney about your divorce. Mortgages Done Right Inc. NMLS #1532755. Greg Hayden NMLS #332209.
