When a couple divorces, deciding what happens to the marital home is often one of the most significant parts of the settlement.
But there's a question that can easily be overlooked:
Who pays for repairs to the home, especially if the lender requires them before refinancing?
October's Divorce Mortgage Insights newsletter from the Divorce Lending Association highlights why this question deserves attention before a divorce settlement is finalized.
A repair that hasn't been addressed in the agreement can become an unexpected obstacle months later, particularly when one spouse is refinancing to complete an equity buyout.
Consider an example shared by the Divorce Lending Association.
A divorcing couple agrees on the value of their home, finalizes the settlement, and moves forward with the divorce.
Months later, the spouse keeping the property applies to refinance the mortgage and fund the equity buyout.
The lender's appraisal identifies a roof repair that wasn't mentioned in the appraisal used during the divorce negotiations.
Now the refinance may be delayed, the settlement deadline is approaching, and neither spouse has an agreement about who is responsible for the repair.
The issue isn't necessarily that anyone made a mistake.
It's that the repair responsibility wasn't addressed before the settlement was signed.
When both spouses are aware of needed repairs, the Divorce Lending Association identifies several ways those costs may be addressed during settlement negotiations.
These include:
Adjusting the property value used to calculate the equity buyout.
Crediting the repair cost against the buyout payment.
Completing the repair before the property transfer, with responsibility for payment established.
Acknowledging the property's existing condition in writing.
Which approach makes sense depends on the circumstances and the guidance of the parties' legal professionals.
The important point is that known repairs should be considered deliberately rather than assuming the agreed-upon property value already accounts for them.
This can be more complicated because the lender's appraisal may not be completed until after the divorce settlement is finalized.
That means the parties may not know in advance which repairs, if any, a lender will require.
According to the Divorce Lending Association, settlement planning should consider how future lender-required repairs will be handled.
Questions for the legal team may include who is responsible for the costs, how those costs will be determined and allocated, and what happens if repairs delay the refinance.
For conventional loans sold to Fannie Mae or Freddie Mac, property deficiencies affecting safety, soundness, or structural integrity generally must be corrected before the loan can close.
Not every cosmetic issue will prevent financing, but certain property conditions can affect the refinancing process.
When a refinance is necessary to complete the divorce settlement, unexpected repairs can affect both the cost and timing of that transaction.
Another important point in October's newsletter is that an appraisal obtained for divorce purposes may not provide the same information as an appraisal ordered by a mortgage lender.
A divorce appraisal is prepared for its specific assignment and intended use.
A lender's appraisal is designed to meet mortgage lending requirements and may identify property conditions that affect financing.
The Divorce Lending Association also discusses changes to the Uniform Appraisal Dataset, known as UAD 3.6.
The redesigned appraisal report provides more structured information about property conditions, including identified defects and estimated repair costs.
The newsletter identifies November 2, 2026, as the required implementation date, while also noting a temporary exception that may allow certain lenders to continue using the previous report format.
For divorcing homeowners, the practical takeaway is that the lender's appraisal may reveal repair requirements that weren't addressed in the original divorce appraisal.
The Divorce Lending Association emphasizes the importance of evaluating refinancing, equity buyouts, and potential repair obligations together while settlement terms are still being considered.
If the condition of the marital home may be an issue, that concern can be raised when the divorce appraisal is ordered so the appraiser understands that property condition is relevant to the assignment.
A Certified Divorce Lending Professional (CDLP®) can also help evaluate the mortgage financing considerations associated with retaining the home.
This is particularly important when one spouse must refinance to remove the other spouse from the mortgage or fund an equity buyout.
For California homeowners and the attorneys representing them, addressing potential financing obstacles early can help reduce the risk of discovering problems after the settlement is final.
Home repairs may seem like a minor detail compared with the larger financial decisions involved in divorce.
But when one spouse is keeping the marital home, repair costs and lender requirements can directly affect whether a planned refinance can move forward.
The question isn't simply whether the home needs repairs. It's whether the settlement addresses who will pay for them and when.
Understanding those possibilities before the agreement is finalized can help homeowners and their professional teams make more informed decisions.
Janice Nugent is a Certified Divorce Lending Professional (CDLP®) and Certified Mortgage Planning Specialist (CMPS®) who helps divorcing homeowners understand mortgage considerations involving refinancing, equity buyouts, and decisions about the marital home.
Serving clients throughout California, including the San Francisco Bay Area and Greater Los Angeles, Janice collaborates with family law attorneys, mediators, and other divorce professionals to evaluate mortgage financing considerations before settlement decisions are finalized.
If you're navigating a divorce or advising a client on decisions involving the marital home, Janice welcomes the opportunity to be part of the conversation.
This article is based on the October 2026 Divorce Mortgage Insights newsletter, “Fix It, Credit It, or Find Out Later: Who Pays for Repairs on the Marital Home in a Divorce,” published by the Divorce Lending Association, LLC. Janice provides mortgage planning and lending guidance and does not provide legal, tax, investment, or financial planning advice. Mortgage financing is subject to applicable lending guidelines and approval requirements.
📩 Janice@JaniceNugent.com
☎ 925-683-0787
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