Are VA Loans Assumable?

Are VA Loans Assumable?

The VA loan program, run by the US Department of Veterans Affairs (VA), offers several benefits for military borrowers seeking a mortgage with no required down payment or mortgage home insurance.

But, are VA loans assumable? Yes, that’s just another advantage of VA loans.

A VA loan “assumption” allows an individual, regardless of their military service, veteran status, or existence of a surviving spouse who qualifies for VA benefits, to take on the terms of an existing mortgage. Both homebuyers and sellers can benefit from this type of transaction.

What Is an Assumable VA Loan?

In financing, an assumable loan refers to a type of arrangement in which the existing mortgage and its terms are transferred from the present owner to the buyer. This provides a buyer the opportunity to purchase a home by taking over the seller’s mortgage loan. Buyers often choose Assumable mortgages, especially when the interest rate has gone down since the seller originally purchased the home since they can take advantage of financing based on a lower interest rate.

It isn’t always the best option to purchase a home this way, especially since some mortgages cannot be assumed. If you consider taking over a seller’s mortgage, there are several important elements you will need to consider.

Related Article: What is IRRRL? Is This VA Loan Right For You?

Are VA Loans Assumable?

VA loans are indeed assumable. As a veteran with a VA loan, if you consider the assumption of the loan as part of your home sale, it’s essential first to understand your rights and the impact the assumption of the loan could have on your VA loan entitlement.

The best way for a buyer to find out if a VA home loan is the best option for them is to consult one of the VA-approved lenders and do their due diligence before making a final determination.

What a VA Assumption Means for Buyers

There are several benefits associated with purchasing a VA mortgage. You are not required to be a military veteran to assume the mortgage payments of an existing VA mortgage. However, as a potential borrower, you will have to prove your creditworthiness to qualify for this loan.

Generally, to meet the VA home loans requirement, you will need:

  • A credit score of 620
  • An income-to-debt ratio of 41%
  • A sufficient residual income for your family size

Veteran Affairs requires you to pay the VA a funding fee of 0.5% of the loan amount no later than 15 days after you’ve taken over the loan. Additionally, there could be a processing fee of $300 or more and a credit report fee depending on the circumstances.

Depending on whether you’re assuming a loan and whether you’re a qualified military borrower or surviving spouse, you might be able to replace the seller’s loan entitlement.

VA funding fee exemptions are also available if you are:

  • Being compensated for a disability you suffered while serving in the military
  • Disabled but receiving active duty or retirement pay instead of disability compensation
  • A pre-discharge disability examination may make you eligible for compensation
  • People who have suffered disabilities or lost their lives while serving in the military.

Related Article: How Many VA Home Loans Can You Have?

What a VA Assumption Means for Sellers

There are also specific requirements that the home seller must follow to qualify for VA loan assumability. For example, one condition is that the seller must be current on their mortgage payments by the time they close the transaction. The seller must also fill out a VA Loan Assumption form.

The VA will not reinstate your loan entitlement until the home has been sold and the loan has been paid in full if a non-military borrower has taken over the loan.

There is still a possibility that you may be eligible for another VA loan if the buyer with whom you intend to deal is also a military veteran. If you are requesting a transfer of ownership, you can also request that the VA restore your entitlement so you can use your VA loan benefits to purchase a new home.

As part of the mortgage assumption process, make sure your lender releases you from financial responsibility for the loan. If the assuming borrower makes late mortgage payments, your credit reports and scores will be negatively impacted.

Requirements for Assuming a VA Loan

For a mortgage to be assumed, the following requirements must be met:

  • Current loans are required.
  • The VA and the lender have different credit and income requirements for new buyers.
  • The new buyer must assume all mortgage obligations.
  • If applicable, you must make any remaining payments before the loan closing date. The original homeowner or the new buyer will be responsible for paying the closing fee.
  • It is necessary to pay the processing fee in advance.

Pros and Cons of a VA Loan Assumption

Depending on whether you want to assume or apply for a VA loan, consider the following pros and cons.


  • Generally, you will be able to get a better interest rate than you might qualify for otherwise.
  • Homeowners can recover their entitlement if they obtain a release of liability.
  • A VA loan could save you a lot of money regarding funding fees and closing costs compared to a new mortgage.
  • VA loans can be assumed without being a member of the active-duty military, a veteran, or even a surviving spouse to qualify for the loan.


  • Generally, you will need good credit and sufficient income to qualify.
  • Homebuyers will likely need to make a down payment equivalent to the home price and loan balance gap.
  • The seller cannot get another VA loan if the assumed loan is not paid in full – unless you sub in your entitlement.

Related Article: How Do I Get a Va Certificate of Eligibility?

Getting Your VA Entitlement Back After a Loan Assumption

You must also formally replace their entitlement with yours when you request the release of liability. If not, you will not be able to borrow any more $0 down mortgages, as your entitlement will be tied to their mortgage.

You can borrow another VA loan with partial entitlement after receiving a release of liability and swapping in the entitlement. Additionally, you may opt for a one-time restore of entitlement, which will allow you to get a loan without any VA loan limitations.

How to Find a VA Assumable Loan

Assumable VA mortgages are easy to find in your local area using several methods.

By Daily Newspapers and Financial Magazines

There is no doubt that the world is gradually moving towards more digital-based media. However, print media is still alive and well. Mortgages that can be assumed are advertised in local newspapers and financial magazines.

Using the Internet & Digital Media

It is possible to locate listings for assumable VA mortgages through several websites and digital platforms, such as TakeList, which offer such services. You can find all the information you need on these websites, including interest rates, balance amounts, and the seller’s expectations about the exchange process.

Real Estate Can Help You

You can also find assumable VA mortgages by contacting a local real estate agent near you. You have a better chance of getting a home that fits your needs if you work with a real estate agent who has access to the Multiple Listing Service (MLS).

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