25 Feb Mortgage Q & A: Can I Assume a VA Home Loan?
Is it possible for anyone to assume a VA home loan?
A VA or a Veterans Affairs home loan guarantee is one of the best ways for veterans to buy and thus afford their existing or new homes. However, it is only for serving and past members of the United States armed forces and members of the Reserves and National Guard, and their surviving spouses, subject to certain eligibility criteria.
Getting a Veterans Affairs loan is not that hard a task, for the eligibility criteria and norms that are associated with it are otherwise less strict than conventional loans. It does come with quite a few advantages of its own to help veterans afford their homes. However, there do arise circumstances where they may need to sell off their homes while moving, or give them to someone else. VA takes care of this as well, since it allows both veterans and those who do not qualify VA loans to assume them from someone who is already using it to make his or her mortgage payments. It is possible to assume a VA loan- though not many people know about it and thus comes up as the most frequently asked question in VA loans.
Does the VA allow for someone else, such as close relatives and those living in the same communities or areas, to take up or assume another person’s home on a VA loan? What are the additional approvals required for this, if any?
As per the rules, for any VA home loan that had been closed post 1st March 1988, the assumption will need the approval of both the lender as well as the VA. To begin the process, the owner of the house and mortgage needs to put in the request for assumption package via the mortgage servicer. The mortgage servicer here refers to the company where you send your mortgage payments.
An important aspect of this is that the original owner must request for release from the liabilities of this loan from the Veterans Affairs. For all VA loans that were closed after 1st of March, 1988, mortgage lender as well as the VA have to approve the assumptions of loans guaranteed by the VA, and an important aspect of the approval process of the same is to go in for a release of liabilities.
In a case where you are eligible to get a Veterans Affairs loan guarantee, there is another added step. In this, you can replace your eligibility in place the original owners as you go ahead to assume the loan. If you do not do that, then he or she cannot use her eligibility status again until the time the loan that you assumed is returned, or until someone else uses his or her own eligibility in place.
Thus, if you too are looking to do anything similar, you can easily start the process and reach out to the VA home loan office should you require more information.