What AB 3100 Actually Requires

Assembly Bill 3100, signed in 2024 and enacting California Civil Code § 2951, was a response to the rate environment that emerged in 2022. As interest rates rose, divorcing California homeowners with conventional loans found themselves trapped: they could not assume the existing conventional loan (conventional loans historically were not assumable), and refinancing would replace their locked-in low rate with the current market rate.

§ 2951 requires conventional home mortgage loans originated on or after January 1, 2027 to include a provision allowing one co-borrower to assume the other co-borrower's share of the loan in connection with:

• A decree of dissolution of marriage
• A decree of legal separation
• An incidental property settlement agreement

The assuming spouse must qualify for the loan under the lender's underwriting standards. The departing spouse, upon completion of the assumption, is removed from the mortgage and relieved of payment obligations.

Why This Matters: Preserving the Low Locked-In Rate

The economic value of § 2951 is rate preservation. A California conventional loan locked at 3.0% or 3.5% during 2020-2021 is materially more valuable than the same loan would be at today's rates. Before § 2951, conventional assumption in California divorce was effectively unavailable, and refinancing was the only path to remove a spouse from the loan, replacing the locked rate with the current market rate.

§ 2951 changes that for loans originated on or after January 1, 2027. Divorcing California couples with covered conventional loans will have assumption as a real planning option, alongside refinance and sale.

The Critical Limit: New Originations Only

The single most important detail in § 2951 is what it does NOT cover: pre-2027 conventional loans. The vast majority of the existing California conventional loan book was originated before 2027. None of those loans are covered by § 2951.

This is the structural difference between California's § 2951 and Maryland's analogous HB 1018, which became effective October 1, 2025 and applies retroactively to existing loans. Maryland reached the existing book; California did not.

For California divorcing homeowners with conventional loans originated before January 1, 2027, the path forward in divorce remains what it has been: refinance, sale, deferred distribution, or a discretionary divorce-incident assumption request to the servicer (not guaranteed).

The Qualification Caveat: You Still Have to Qualify

§ 2951 requires lenders to include the assumption provision. It does not require lenders to approve the assumption. The assuming spouse must still meet the lender's existing credit, income, and debt-to-income standards under the lender's underwriting policies.

What needs to be true for the § 2951 assumption to actually fund:

• Sufficient income: The assuming spouse's documented income must support the existing monthly payment under the lender's DTI guidelines.
• Adequate credit: Conventional credit standards (typically 620+ score, often higher in practice).
• Acceptable DTI: Conventional ratios typically 43% to 50% depending on compensating factors.
• Support income that meets the three-year rule: If alimony or child support is part of qualifying income, the documented continuance must extend at least three years from application.
• Sufficient reserves and clean documentation.

How § 2951 Interacts with California Divorce Law

California's strict 50/50 community property rule under Family Code § 2550 makes the buyout math in a California divorce mechanical: community equity is divided equally. The financing piece, however, has always been the constraint. § 2951 addresses that constraint for covered loans.

The interaction with California's other divorce-specific rules:

• Moore/Marsden apportionment still governs separate-property home appreciation; § 2951 does not change apportionment math.
• Prop 13 base year preservation through the Interspousal Transfer Deed remains available; § 2951 facilitates the financing side of the transfer.
• Family Code § 2640 reimbursements for separate-property contributions to community assets are unchanged by § 2951.

For the broader California divorce-mortgage framework, see the California state page.

How to Plan for § 2951

If You Are Originating a California Conventional Loan in 2027 or Later

The lender is required to include the § 2951 assumption provision in your loan. Confirm in writing at closing that the provision is present and that you received any disclosures the lender provides about the assumption right. Keep this documentation. If you ever face divorce, this is the documentation that activates the assumption path.

If You Are Considering Divorce With a Pre-2027 California Conventional Loan

§ 2951 does not apply. Your realistic options are refinance, sale, deferred distribution, or a discretionary assumption request. A Strategy Review walks through which path fits your loan, your qualification picture, and your settlement timeline.

If You Are Considering Divorce With a 2027+ California Conventional Loan

§ 2951 applies. The planning sequence:

1. Confirm with your servicer that the assumption provision is in your loan and that they recognize the § 2951 framework.
2. Pre-qualify the assuming spouse before settlement language is finalized.
3. Build settlement language that references § 2951 and supports the assumption process.
4. Require a written release of liability for the leaving spouse.
5. Include backup language in the settlement directing a refinance or sale if the assumption is denied.
6. After the divorce decree, submit the assumption application under § 2951.
7. Confirm the release of liability is issued at closing.

The Backup Plan Is Still Required

Even with § 2951's mandate that lenders permit the assumption process, the lender retains the authority to deny the application for failing to meet credit, income, or DTI standards. Every § 2951 plan needs a backup, just like every other assumption plan.

The most common backups in California divorces:

• Refinance into the keeping spouse's name only. Cost: locked rate is replaced with the current market rate.
• Sale of the home with proceeds divided per the strict 50/50 community split.
• Deferred distribution structures where the keeping spouse stays in the home and the leaving spouse holds a lien for their share.

A Certified Divorce Lending Professional (CDLP®) familiar with California coordinates the § 2951 assumption application and the backup plan in parallel, so the settlement is structured to survive a denial without months of wasted runway.

How California Compares to Maryland

The two state-law mandates differ in important ways:

• California § 2951: Effective January 1, 2027. Applies only to new originations on or after the effective date.
• Maryland HB 1018: Effective October 1, 2025. Retroactive to existing loans. Also imposes a pre-application disclosure requirement.

For divorcing Marylanders with existing conventional loans, HB 1018 provides immediate access to the assumption framework. For divorcing Californians with existing conventional loans, the wait continues for either a future statutory expansion or a discretionary servicer accommodation.

Both laws preserve lender underwriting requirements. Both apply only to conventional loans (FHA, VA, USDA already have their own assumption frameworks). The trajectory in additional states is being watched closely by industry and consumer advocates.