Down Payment Before Marriage Or From Separate Funds Not Community Property

Marriage, housing purchase, children, divorce.  Those are four of the most important things that people do.  The don’t necessarily happen in the order set out.  One question I am asked time and again: “If I put a down payment on a house with my money before we were married can I get ‘credit’ for it during a divorce?”  The answer is “Yes.”  Even if you are married, if you use separate funds to make a down payment you are entitled to those funds in a divorce.  You are not entitled to interest or “equity.”  Family Code Section 2640 is the legal authority for this rule.  Here is the statute’s (somewhat hard to follow) language:

2640. (a) “Contributions to the acquisition of property,” as used in this section, include downpayments, payments for improvements, and payments that reduce the principal of a loan used to finance the purchase or improvement of the property but do not include payments of interest on the loan or payments made for maintenance, insurance, or taxation of the property.

(b) In the division of the community estate under this division, unless a party has made a written waiver of the right to reimbursement or has signed a writing that has the effect of a waiver, the party shall be reimbursed for the party’s contributions to the acquisition of property of the community property estate to the extent the party traces the contributions to a separate property source. The amount reimbursed shall be without interest or adjustment for change in monetary values and may not exceed the net value of the property at the time of the division.

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