Can I Recover the Down Payment I Made on My Home?

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If you are ending your marriage in Fresno or elsewhere in California, you may be wondering if you are entitled to recoup the money you provided for a down payment on your family home. This is a common question with a relatively simple answer: generally, yes, depending on the source of the funds you contributed, you can recover your down payment.

More specifically, if you dipped into your personal savings from before your marriage, collected money from refinancing or selling another property you own or owned previously, or received a personal gift from a family member or friend that you used as a down payment on your eventual marital home, that money may be recouped in the event that you divorce and upon the resale of that home provided you have adequate records proving where the source of the funds came from or your spouse agrees to the characterization of the funds being your separate property.

California law is on your side

CA Family Code 2640  provides a method for recovering pre-marriage earned or acquired funds (known as separate property) that you put toward a community asset with your spouse. Of course, the law includes some stipulations. Only types of payments considered to be “contributions to the acquisition of property” can be recovered. Additionally, your reimbursement does not include interest. Finally, the amount you collect may not exceed the current value of the property.

How does a Family Code 2640 reimbursement claim work?

There are three simple phases to a 2640 reimbursement claim:

  • Establish the amount of the down payment you contributed
  • Identify the source from which the down payment came
  • Provide documents or other evidence that you acquired the funds independently, either through private earnings or savings, from the sale of another property, or as a personal gift

The process of compiling this evidence is known as tracing. You and your attorney will obtain and go through escrow documents, bank statements, previous home sale or refinance paperwork, and any other relevant contracts or receipts that support your claim. If you received the down payment as a gift, you can also request a signed and notarized letter from the gift giver confirming the amount of the gift to you and its purpose.

Obtaining the money you are owed

Once you compile and provide the necessary evidence to verify your 2640 claim and the claim is accepted, all that’s left is for you and your ex to sell your former marital home. After repaying the bank anything you and your ex still owe on the house, what’s left is equity. You are reimbursed your down payment from that equity first; whatever remains is then considered community property and is subject to equitable division in your divorce.

Consult a Fresno divorce attorney who can help you recover your down payment

If you have questions about your right to the down payment you paid from separate property, reach out to the Law Office of Rebecca Medina today. We understand all aspects of equitable division laws related to divorce in California and provide our clients with unparalleled service. To learn more, call (559) 324-5427 or contact us online and schedule a consultation.

Rebecca MedinaAbout the Author: Rebecca Medina

Rebecca Medina is an experienced family law attorney serving the Fresno area. She handles cases ranging from complex divorce matters to child custody, spousal support, domestic violence, and uncontested divorce cases. She was rated “Clients’ Choice” by Avvo.

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