Civil Code Section 2951: Too Little, Too Late?

Written by:  Hon. Victoria Wood (Ret.) 

 April 28, 2025

In divorce cases, deciding what to do with the marital home is often one of the most emotionally and financially challenging issues. Traditionally, divorcing couples with a mortgage have had two main options: sell the property and divide the proceeds, or have one spouse buy out the other—typically by refinancing the loan in their own name. However, in today’s high-interest-rate environment, refinancing often results in much higher monthly payments, rendering this option impractical even for borrowers who would otherwise qualify.

When retaining the family home becomes financially unfeasible due to significantly higher mortgage rates, the result can be deeply disheartening—especially for families with children who are already grappling with the emotional upheaval of divorce. Losing the home many times means relocating, changing schools, and disrupting routines and community ties during an already volatile and vulnerable time.

This emotional and financial pressure on divorcing parties will often result in stalled settlement negotiations and drive them toward costly litigation and away from cooperative resolutions. The inability to find a workable solution to maintaining the family home frequently becomes a roadblock that can completely derail a mediated or otherwise resolvable case.

Enter AB 3100

In response to these growing challenges, California Assemblymember Evan Low introduced Assembly Bill No. 3100 in early 2024. Signed into law later that year to take effect on January 1, 2025, the bill was chaptered as Civil Code section 2951—a statute designed to ensure for divorcing couples that much-needed third option: the mortgage assumption.

This new law mandates that lenders in our state allow a co-borrower on a conventional mortgage loan to assume the mortgage—including its existing interest rate and terms—following a marital dissolution, provided that the borrower independently meets the lender’s credit and qualification requirements. In other words, if one spouse can qualify on their own, they can take over the loan without triggering a refinance at the current interest rates.

As Family law attorneys know, this type of strategic financial tool will not only allow one party to keep the family home while preserving more favorable loan terms, but it can also reduce the financial strain that often derails settlement discussions, provide a practical path to resolution that avoids unnecessary litigation and open the door for more creative, customized settlement agreements.

The Limitations

There is, however, a significant caveat to what would otherwise have been an immediate game-changer: Civil Code section 2951 applies only to mortgage loans originated on or after January 1, 2027. That means it will not help current clients with loans secured during the era of ultra-low interest rates.

For now, families navigating divorce in the upcoming years will unfortunately still face the full impact of high-interest rate refinancing, unless interest rates dip down significantly again. The statute offers no retroactive relief to those struggling with this issue today.

Looking Ahead

While the law may come too late to ease the current wave of divorcing parties facing narrow options for maintaining the family home, it represents a thoughtful and proactive policy shift for the future. It acknowledges the deep connection between home stability and family well-being, and it lays the groundwork for smoother resolutions in divorces that occur down the line.

If history repeats itself—and economic cycles suggest it will—interest rates will eventually rise again after another low. Thanks to Civil Code section 2951, future divorcing couples won’t be caught in the same financial bind. Though it doesn’t solve today’s problem, this legislation sets an important precedent: prioritizing residence stability in family transition matters by having the law evolve to meet that need. And that kind of forward-minded precedent should never be viewed as too little, too late.