Legal Question in Real Estate Law in California

If the property is purchased with community funds, it is fully community property no matter whose name the title is in.

The lender is probably thinking that a VA loan would be the husband's separate property because his military service that qualified him for the loan was while he was single, and therefore the loan is separate property money. Without researching this, I can say this is almost certainly not true. However, it is very easy for married couples in California to elect by written agreement to set up, or to change, the ownership of their property from separate to community, or community to separate. So, the answer to your question is ultimately unimportant to any decision to buy property together. With proper documentation, you can set up the ownership as you like, or by written agreement between you, you can change it later on. The escrow and title company may be able to handle the paperwork, or safer yet, for a few hundred bucks you can have a California family law attorney do it. Then, use whatever loan has the best terms - probably the VA. But don't figure on the type of loan influencing how title will be held.

Mr. Whipple gave you a correct, but somewhat confusing answer. Let me give you the short version. Whether you have a VA loan or not makes no difference from a legal standpoint to whether you can buy a house and take title in only your husband's name. You can always do that as long as any lender involved will accept a deed of trust based on the recorded ownership you want.

Where it gets complicated is that record title is not always the same as true legal entitlement to interests in the property as between spouses, or between widows/widowers and other heirs. The interests can change unintentionally, based on where money comes from to pay the mortgage and other expenses for example. The interests can also change intentionally by properly drafted and executed agreements that may or may not need to be put in the record title.

The bottom line is that married couples buying property and taking title in the name of only one of them always seems like a good idea at the time, but it rarely is. And it almost inevitably makes a real mess of things in the case of a divorce or death, unless the reasons for doing it are fully explained to an experienced attorney who then covers everything with proper post-nuptual and estate planning documents.

In addition to the above good points, most institutional lenders will want you to sign away your interest, either by quitclaim or interspousal transfer deed, in order to loan the money. This will create problems for you both down the road, in the event of divorce or probate.