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Here's the deal: VA loans let someone else step into your shoes and take over your exact loan terms. This isn't some new feature. It's been baked into the VA program since the beginning.
When I say "assumable," I mean a buyer can adopt your existing mortgage. They keep your interest rate, loan balance, and remaining term. You locked in 3.5% back in 2021? That rate transfers to the next buyer in 2025, even though current VA rates hover around 6% or higher.
This isn't just theoretical savings. Let me show you the math.
Scenario: Home seller has $350,000 VA loan balance at 3.5% with 27 years remaining.
That's real money staying in someone's pocket. Not gonna lie, when I walk buyers through these numbers here in Dallas-Fort Worth, I can see the moment it clicks. Especially with home prices climbing 40% since 2020.
This is where it gets interesting. Almost anyone can assume a VA loan. You don't need military connection whatsoever.
Best-case scenario for sellers. When a veteran with their own entitlement assumes your loan, they substitute their entitlement for yours. You get your full VA benefit back immediately. Clean. Straightforward. Nobody's entitlement stays trapped.
Between you and me, this requires careful math. If a veteran used some entitlement on another property they still own, they might not have enough remaining to fully substitute yours. They can still assume the loan. But you might not get full entitlement released.
Here's what's pretty amazing: regular civilian buyers with no military service can absolutely assume your VA loan. They just need to meet the lender's credit and income requirements. No military service needed, no special qualification beyond standard mortgage approval.
The catch? When non-veterans assume your loan, your VA entitlement stays attached to that property until the loan is completely paid off. We'll dig into why that matters in a minute.
So I was talking to a borrower yesterday who thought assumable meant automatic approval. Not quite. Lenders still need to approve assumptions, and they'll review your finances carefully.
At AmeriSave, we work with borrowers to understand these requirements upfront. Which helps streamline the entire process and avoids surprises later on.
The VA doesn't mandate minimum credit scores. But lenders? They definitely have standards.
According to 2025 data from multiple VA lenders:
(According to Veterans United Home Loans and Navy Federal Credit Union, 2025; Accessed October 31, 2025, from https://www.valoans.com/eligibility/credit/)
I've seen assumptions approved with scores in the 580s when buyers have strong income, low debt and solid residual income. The VA's residual income requirement – money left after paying all major expenses – often matters more than credit score itself. This is the part that catches people off guard.
Lenders want to see you can comfortably afford the payment. They calculate debt-to-income (DTI) ratio by dividing total monthly debt by gross monthly income. Most lenders prefer ratios at or below 41%.
But the VA also requires sufficient residual income, which varies by family size and region. This is the part nobody talks about. You might have a 38% DTI that looks great, but if your residual income doesn't meet VA standards for your family size, you could still face challenges.
Every VA assumption comes with a 0.5% funding fee (According to U.S. Department of Veterans Affairs, 2025; Accessed October 31, 2025, from https://www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/). This is dramatically lower than new VA purchase loans.
Veterans exempt from standard VA funding fees are also exempt from assumption fees. This includes veterans receiving VA disability compensation, surviving spouses receiving DIC and service members who received the Purple Heart.
Okay, real talk for a second. The assumption process isn't complicated. But it requires patience and paperwork. Here's what you need to know about.
Before anything else, determine if you're assuming as a veteran with entitlement or as non-veteran. Veterans should request Certificate of Eligibility (COE) from the VA. Through eBenefits, through your lender, or by mail using VA Form 26-1880. The COE shows available entitlement.
Non-veterans can skip this step. But understand the seller's entitlement stays with the property.
You can't just show up and assume someone's loan. The existing lender must approve the assumption. Different lenders have different processes, but generally you'll submit:
AmeriSave guides borrowers through this documentation process to ensure smooth lender review and faster approval timelines, which makes a huge difference in how quickly you can close.
The lender pulls your credit, verifies employment, calculates DTI ratio and assesses residual income. This looks like a regular mortgage application. Just without needing to shop rates or lock new terms.
And here's where it gets interesting – the lender also verifies you can handle property taxes and insurance. Which have both climbed significantly in recent years.
If approved, you pay the 0.5% funding fee, sign assumption documents and officially take over the loan. The seller signs release documents, and property title transfers. The whole process typically takes 30-45 days. Though I've seen it happen faster when everyone stays organized.
Look, finding homes with assumable VA loans requires detective work. These properties aren't always clearly marked in MLS listings. And many sellers don't realize their loan is assumable.
The best agents working with military families know to ask about whether they can assume the loan. If the seller's agent mentions VA loan, your agent should immediately follow up about assumption possibilities.
Several platforms now focus specifically on assumable loans:
These sites let sellers list properties specifically because of assumable financing. Inventory varies by market but it's growing as more people recognize value in higher rate environments.
Not gonna lie, some of best deals happen through word of mouth. If you're stationed at a base or live near one, let people know you're interested. Facebook groups, base bulletin boards and military spouse networks can be goldmines for this.
Ask your agent to filter for:
According to Veterans United data from 2025, loans originated in 2020-2021 with rates below 3.5% are actively marketed as major selling points (Accessed October 31, 2025, from https://www.veteransunited.com/valoans/va-loan-assumption/).
Between you and me, this is the part that keeps me up at nite when working with sellers. The entitlement issue can seriously impact your ability to buy your next home. And too many people don't understand it until it's too late.
Every eligible veteran starts with basic entitlement of $36,000. For loans above $144,000, the VA provides additional "bonus" entitlement. As of 2025, standard county entitlement maximum is $201,625 ($806,500 × 0.25), with high-cost counties reaching $302,437.50 ($1,209,750 × 0.25) (According to Federal Housing Finance Agency, 2025; Accessed October 31, 2025, from https://www.va.gov/housing-assistance/home-loans/loan-limits/).
When you use VA loan to buy a home, a portion of your entitlement gets "charged" to that loan. This isn't money you're spending. Think of it as the VA's commitment to guarantee your loan to the lender.
Best case. When qualified veteran with sufficient entitlement assumes your loan, they substitute their entitlement for yours. You get full entitlement back immediately.
This is where it gets sticky. When civilian assumes your VA loan, your entitlement remains tied to that property until loan is completely paid off.
Can you buy another home with VA loan? Yes. But your available guarantee is reduced. Using the "four times entitlement" rule most lenders follow, you could potentially get approved for up to $506,500 without down payment ($126,625 × 4).
Want to buy above that amount? You'll need down payment to cover the difference. That 0% down benefit that makes VA loans so attractive? You might lose it on your next purchase.
AmeriSave helps veterans understand how assumptions affect their remaining entitlement and future purchasing power before they commit to allowing assumptions, which prevents major headaches down the road.
Okay, real talk. This is the most critical document in the entire assumption process.
When someone assumes your VA loan, you don't automatically stop being responsible for it. Your name might be off title. But legally, you're still on the hook for that debt unless you get formal release of liability from lender.
Think about what this means. If the new borrower stops making payments, the lender can still come after YOU. Your credit gets destroyed. You could even face foreclosure proceedings, all for a house you no longer own.
I've seen this happen. A veteran sells their home, thinks everything's handled. Then a year later discovers their credit score tanked because the buyer who assumed their loan stopped paying.
The process varies by lender but generally requires:
The lender isn't required to grant release of liability. If they determine the assuming buyer doesn't meet their standards, they can approve assumption without releasing you. Confirm release BEFORE closing.
If the lender won't commit to release, seriously consider whether to proceed. It might be safer to sell through conventional means rather than risk your financial future on someone else's payment history.
This is where it gets interesting. The benefits go beyond just the interest rate.
In 2025, the market for new VA loans might have rates of 6% or more. A loan from 2020–2021 at 2.75%–3.5% could be a chance to build wealth for generations. This could save you $100,000 to $200,000 over the course of 30 years. That's money that you will always have.
Standard VA purchase loans have other closing costs, such as appraisal fees ($500–$800), origination fees (usually 1% of the loan), and more. According to Veterans United's 2025 data, the average closing costs for a VA purchase loan of $300,000 are between $8,000 and $12,000.
Most fees are skipped by assumptions. The closing costs for a typical assumption could be between $2,000 and $4,000 for the same loan. You could save $6,000 to $8,000 or more.
This has always been a benefit of VA loans. PMI is required for conventional loans until the borrower has 20% equity. Most of the time, FHA loans need mortgage insurance for the life of the loan. VA loans never need mortgage insurance, no matter if you're getting a new loan or taking over an old one.
You still need the lender's approval, but the VA assumption process can be more forgiving than getting a new loan. Credit standards and the need for residual income are still in place. But some lenders see assumptions as less risky because the loan has a history of on-time payments.
In a competitive market, a low-rate VA loan that can be assumed can make a big difference. When buyers figure out how much they can afford to pay each month, your property with a 3% rate looks a lot better than the house next door that needs a new 6.5% loan.
Some sellers can get higher prices because they offer assumable financing. If your loan rate is 2.5 percentage points lower than the market rate, that difference in monthly payments is worth a lot. Buyers might pay $10,000 to $20,000 more because of the assumable loan, especially if they are paying cash for equity that is more than your loan balance.
By advertising your home as having an assumable VA loan, you are making it possible for people who might not otherwise be able to buy a home in your price range to do so. If you pay 3% interest on your $450,000 home, it might feel like a $400,000 home in terms of monthly cost.
AmeriSave helps sellers market their assumable VA loans well and find qualified buyers who understand the value proposition. It really helps to sell homes more quickly.
I'm not here to just say nice things. There are real problems with VA assumptions that can make them wrong for some situations.
It's not easy to find a home with an assumable VA loan at a great rate in the area you want. There isn't a lot of supply. And as more people see this chance, the competition gets tougher. You could spend months looking for the right property and not find it.
When rates were low in 2020–2021, the value of most homes went up a lot. In 2021, someone bought a house with a VA loan for $300,000. Today, that house is worth $400,000, and they've paid off the rest of the loan, which is $275,000.
You need $125,000 in cash to pay off the equity. That's a big down payment. And it takes away one of the main benefits of VA loans: the ability to buy with no money down. You're basically putting together the VA assumption's complexity with the cash needs of a regular purchase.
Not all lenders are good at handling assumptions. Some people take their time. Some have strict rules. And not many people actively discourage assumptions because they don't make much money off of them. You might put a lot of time and effort into pursuing an assumption, only to have it denied or delayed, which kills the deal.
The seller agreed to whatever terms were in place at the 2.75% rate. You can't change your mind about the timeline if you chose a 30-year loan and have 26 years left. You can't shorten the term without refinancing, which defeats the whole point.
If a non-veteran takes over your loan, your VA benefits will stay frozen until the loan is paid off. It could take decades. This makes it very hard to buy another home with VA benefits. You should think about this.
If you don't get a release of liability, you're still responsible for that loan. This is the part that makes me crazy because too many sellers don't get how risky it is until it's too late. Someone else's payment habits are now linked to your financial future.
It might take 30 days for traditional sales to close. Assumptions usually take 45 to 60 days or longer, especially if the lender is slow, or the VA needs to approve the release of liability. If you have PCS orders with a short deadline, this long process is a big problem.
Assumable loans are a selling point, but they also limit the number of buyers in some ways. You need buyers who know how assumptions work, have enough money to cover equity, can get approved by the lender, and are willing to go through a more complicated process. That's a smaller group than people who are just looking for homes in your price range.
After all this time, I've learned that the question isn't "Can I do this?" It's "Should I do this?"
The answer depends on your situation.
In the right situations, VA loan assumptions can be very helpful. But they don't work like magic. Before you go down this path, do the math, know the risks, and make sure the numbers work for your situation.
If you want to know if VA assumptions make sense for you, AmeriSave's loan specialists can help you look at your credit history, financial goals, and home buying timeline.
If you're thinking about taking over a VA loan, whether you're a buyer looking to save thousands or a seller looking for ways to market your home, the first thing you need to do is get the right information for your situation.
We help borrowers at AmeriSave Mortgage Corporation figure out if VA assumptions are a good financial choice. Depending on their situation, credit history, and goals for owning a home. We figure out how much money you would save by making an assumption instead of getting a new loan. Tell me how entitlement would change. And show you how the whole assumption process works.
Are you ready to look at your choices?
Call AmeriSave to talk about whether VA loan assumption is the best option for you. Our loan experts know how complicated assumptions can be, and they can give you personalized advice based on your financial situation and when you want to buy a home.
U.S. Department of Veterans Affairs. (2025). VA funding fee and loan closing costs. Retrieved October 31, 2025, from https://www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/
U.S. Department of Veterans Affairs. (2025). VA home loan entitlement and limits. Retrieved October 31, 2025, from https://www.va.gov/housing-assistance/home-loans/loan-limits/
Federal Housing Finance Agency. (2025). 2025 conforming loan limits. Retrieved October 31, 2025, from https://www.fhfa.gov/DataTools/Downloads/Pages/Conforming-Loan-Limits.aspx
Veterans United Home Loans. (2025). VA loan credit score minimums and lender requirements. Retrieved October 31, 2025, from https://www.veteransunited.com/realestate/va-loans-and-credit-score-minimums-what-all-buyers-need-to-know/
Veterans United Home Loans. (2025). VA loan assumption: How it works. Retrieved October 31, 2025, from https://www.veteransunited.com/valoans/va-loan-assumption/
Veterans United Home Loans. (2025). 2025 VA loan limit calculator. Retrieved October 31, 2025, from https://www.veteransunited.com/education/tools/va-loan-limit-calculator/
The Federal Savings Bank. (2025). 2025 VA loan limits: What you should know. Retrieved October 31, 2025, from https://www.thefederalsavingsbank.com/Blog/2025-va-loan-limits-what-you-should-know/
VA Loans. (2025). Minimum credit score for VA loans. Retrieved October 31, 2025, from https://www.valoans.com/eligibility/credit/
Of course. This surprises a lot of people, but non-military buyers can definitely get VA loans. The VA program doesn't only let veterans make assumptions. To get a loan, you usually need to have a credit score of at least 620 and enough extra income to cover the loan payments. The main difference is that when a non-veteran takes over the loan, the original veteran's right to the property stays with it until the loan is paid off in full. If sellers want to use VA benefits again, this makes things more difficult for them. But for you as a civilian buyer, the assumption process is easy. In a way, you're taking on the seller's role and agreeing to their exact loan terms. The interest rate, the remaining balance, and the payment schedule. The best part is that you can get a below-market interest rate without having to serve in the military, but you will still have to pay a 0.5% funding fee. A lot of people are interested in this because they can get a 3% rate in a 6% market, which saves them hundreds of dollars a month and could save them tens of thousands of dollars in interest over the life of the loan. Just be ready to bring cash to the closing to pay off the seller's equity, since you're taking over their loan balance, not the home's current market value. We help non-veteran buyers at AmeriSave understand the whole assumption process and figure out if getting an assumable VA loan is a good idea for their financial situation.
This all depends on whether you are a qualified veteran or civilian buyer. And it's one of the most important things sellers need to know before they agree to an assumption. If you're a veteran with enough entitlement, you can formally switch your VA entitlement for the seller's through the lender. This is the best case scenario for sellers because they get their full entitlement back right away, which means they can use VA benefits to buy their next home without any restrictions. Substitution needs approval from the VA and processing by the lender, but once it's done, everyone wins. If you're not a veteran or a veteran who doesn't have enough entitlement to substitute, the seller's entitlement stays with the property you're buying until the loan is paid off in full. It could be twenty-five or thirty years, depending on how long the loan is still open. The seller doesn't lose their right forever. It's just added to the cost of this property. They might still be able to use their remaining entitlement to buy another home, but they would be able to borrow less money. If they had $100,000 in entitlement charged to your assumed loan and their county maximum is $201,625, they would only have $101,625 left for their next purchase. Using the standard lender calculation of four times entitlement, they could borrow up to about $406,500 without a down payment instead of the full county limit. Anything over that would need a down payment to make up for the lower guarantee. This is why many veterans would rather sell to other veterans who can give them something else. It makes sure that their VA benefits are always available for them to use in the future. Before making any assumptions, AmeriSave helps both buyers and sellers understand what entitlement means so that everyone can make smart choices about their VA benefits.
In my experience working with borrowers in thirty-seven states, the average time it takes for a VA assumption to go from application to closing is between forty-five and seventy-five days. I've seen it change a lot, though, depending on how efficient and complicated the lender is. The timeline is longer than a normal purchase because you're working with the seller's current lender instead of looking for the best service. Some lenders handle assumptions quickly and easily. Some people are just really bad at it. With old systems and staff who don't often deal with assumptions. The first two to three weeks are usually spent gathering paperwork and sending in a full application package. Recent pay stubs, tax returns, bank statements, credit authorization, and military paperwork if you're a veteran looking for entitlement substitution. After that, the lender needs another two to four weeks to check your credit, confirm your employment and income, figure out your debt-to-income ratios, and look at your residual income needs. If you need manual underwriting because your credit score is below 620 or you don't have much credit history, it will take another week or two. Once the lender agrees to your assumption, you can start getting ready for closing. This includes title work, making assumption documents, setting up the payment of the funding fee, and scheduling the closing. VA must also approve the assumption for loans that were made before March 1988. This can take an extra two to three weeks. If you want to get a release of liability for the seller or change your entitlement, you should plan on extra processing time. The best way to speed things up is to keep your paperwork in order, respond to lender requests right away, and work with real estate agents and title companies who know how to handle assumptions. Some lenders will process your application faster for an extra fee, but not all of them will. We help borrowers understand what to expect during the assumption timeline and work with everyone involved to keep the process moving smoothly.
The VA does not set a minimum credit score for loan assumptions. The agency has always said that lenders should look at a borrower's whole financial picture, not just their credit score. But each lender does have its own credit requirements. And they are very different depending on how much risk the lender is willing to take and the rules they follow when underwriting. Most VA lenders in 2025 will only let you take out a loan if your credit score is at least 620. This is the same as their requirements for new VA purchase loans. Data from several lenders, such as Veterans United and Navy Federal Credit Union, show that 620 is now the industry standard baseline. Some lenders, especially those who work with borrowers with bad credit, will consider assumptions with scores as low as 580 or even lower if you have strong reasons to believe you can pay them back. For example, a high income, a low debt-to-income ratio, a lot of cash on hand, or a lot of residual income. When it comes to VA loans, calculating residual income is very important and sometimes more important than your credit score. You need to show that you have enough money left over each month after paying all of your major bills to cover the basic needs of your family. The VA has tables that show how much money you need to make based on where you live and how many people are in your family. If your credit score is below the lender's minimum, you might still be able to get a loan through manual underwriting. Where a real person looks over your whole file instead of relying on automated systems. When you do manual underwriting, you look at things like your history of paying rent and utilities, how stable your job is, and why you had credit problems in the past. Some people with scores in the 500s have been able to get VA loans through manual underwriting by showing that they have made all of their payments on time for the last two to three years since having problems. The most important thing is to be honest about your credit situation from the start, get prequalified early in your home search, and maybe even work with the lender's credit improvement team if you need to raise your score before getting approved for an assumption. AmeriSave offers credit counseling services to help people understand their credit history and take steps to raise their scores if they need to before applying for VA loan assumptions.
Yes, for sure. If the VA loan doesn't lock you into those terms for good. Refinancing may or may not make sense, depending on your goals and the state of the market when you're ready to do it. Let's look at some examples. If you're a qualified veteran who took over someone else's VA loan, you have a number of options for refinancing. If rates go down below what you thought they would be and you want to lower your payments even more, you could get a VA Interest Rate Reduction Refinance Loan (IRRRL) or a streamline refinance. This kind of refinance is very easy. Most of the time, you don't need to provide much paperwork or an appraisal, and the funding fee is only 0.5%. You could also do a VA cash-out refinance to get money from your home's equity for home improvements, paying off debt, or other things. This comes with higher funding fees, though: 2.15% for first-time VA cash-out users and 3.3% for repeat users. If you took out a VA loan but are not a veteran, your options for refinancing are different. Since you can't use VA products, you'll need to refinance into a conventional loan or an FHA loan. If rates go down a lot, you want to get cash out of your equity through cash-out refinancing, or you need to change the length of your loan, this might make sense. If you refinance your VA loan into a conventional loan, you'll lose the benefits that come with a VA loan. There is no mortgage insurance on loans with less than 20% equity. The bigger question is whether it's worth it to refinance if you already have a rate that is lower than the market rate. If you took out a loan at 3.5% in 2025 when rates are 6%, it would be a bad idea to refinance unless you really need to get equity or change the loan structure for some reason. Be careful when you run the numbers. Taking into account closing costs, any early payment penalties, and the total interest you would pay over the remaining loan term before refinancing away from a great assumed rate. AmeriSave can help you figure out if it makes sense to refinance your assumed VA loan based on your current financial situation and the state of the market.
It usually costs a lot less to close on an assumption than it does to start a new VA purchase loan. Which is one of the biggest financial benefits. The VA funding fee of 0.5% of the loan balance you're taking on is a required cost. That's $1,500 on a $300,000 loan. A new first-time VA purchase would have a 2.15% funding fee, which would be $6,450 on the same amount. Just the difference in funding fees saves you $4,950. You'll also have to pay for a credit report, which usually costs between $30 and $75 for a tri-merge report that includes information from all three credit bureaus. You will need a title search and title insurance policy to protect the lender's interest. The cost varies by location and home price, but it usually costs between $800 and $1,500. Some lenders charge an assumption processing fee, which can be anywhere from $250 to $500, depending on the lender's rules. The VA has actually given advice on assumption fees, saying that they should not be more than $300 for most transactions in Circular 26-24-5. You will also have to pay your county to record the deed and assumption documents. This fee is usually between $100 and $300, depending on how your local government charges fees. You don't have to get an appraisal for assumptions, but if you do, you should expect to pay $500 to $800 for a standard single-family home appraisal. You will have to pay the seller back for any property taxes or homeowners insurance they paid before the closing date. This isn't really a closing cost; it's more of a prorated expense. You might also have to pay for a survey, pest inspection, home inspection, or other due diligence items. These are buyer protections that are not required by law, though. For a $300,000 loan, the average VA assumption closing costs are between $2,500 and $4,500. This is less than the $8,000 to $12,000 it costs to start a new VA purchase loan for the same amount. That could save you between $5,000 and $7,000 just in closing costs. Before taking into account the savings on interest rates over the life of the loan. The exact costs depend on where you live, how your lender charges fees, and whether you want extra services like appraisals or surveys. So get a detailed estimate from the lender early on. We give clear estimates of closing costs up front at AmeriSave so that borrowers know exactly how much money they will have to pay back when they take out a VA loan.
This is the most common thing that happens with VA assumptions in 2025. And this is the part that catches a lot of buyers off guard when they first look into it. Home prices have gone up a lot since 2020–2021, when interest rates were at their lowest level ever. So most homes with assumable VA loans with low rates have a lot of equity. Let's go over a common example. Say a veteran bought a house in 2021 for $350,000 with a VA loan and no down payment. And they've been paying it off for four years. They could owe $330,000 right now. But in a lot of markets, that same home is now worth $450,000 because it has gone up in value. As the buyer, you would need to bring $120,000 in cash to the closing to make up the difference between the $330,000 loan balance you're taking over and the $450,000 purchase price. For a lot of buyers, this is the biggest practical problem with VA assumptions. You're getting an interest rate that's lower than the market rate. But you're giving up the 0% down payment benefit that makes VA loans so appealing. In today's market, you basically need the same amount of money for a down payment as you would for a regular loan to take over most VA loans. Some buyers get around this by taking out a second mortgage or home equity loan to make up the difference in equity. This can get tricky, and not all lenders will let you do it. Some people might try to get sellers to agree to a second mortgage in exchange for some equity. This is rare, though, and the seller must be willing and financially stable enough to lend you money. The most common solution is to have a lot of cash on hand. It could be from selling a previous home, an inheritance, savings, or something else. Before making an assumption, figure out exactly how much money you will need by subtracting the remaining VA loan balance from the current value of your home. Then, honestly think about whether you have that money and whether putting it into a home makes sense for your financial situation. Sometimes saving money on monthly payments with a low interest rate is worth the cost of a large cash outlay. Sometimes it's better to use that money as a down payment on a different home with a new loan at the current interest rates. AmeriSave helps buyers do a full financial analysis to see if the equity requirement for a specific assumable VA loan makes sense based on their overall financial situation and goals for buying a home.
Yes, sadly. From the seller's point of view, this is probably the most scary part of the assumption process. That's why I always take great care when I explain it. When you take over someone's VA loan, they are still legally responsible for that debt. The seller stays on the loan unless they get a formal "release of liability" from the lender as part of the assumption process. Think about what this means in real life. If you take over my loan, close on the property, get the keys, and then lose your job six months later and stop making payments, the lender can come after me for money. My credit score goes down. I could be subject to collection actions. And I could even be sued for money I owe on a house I don't own or live in anymore. Before agreeing to any assumption, sellers must absolutely insist on getting a release of liability. And buyers need to know that this doesn't happen on its own. The lender has to agree to the release. And they will only do that if they are sure you can handle the loan on your own. The lender will look over your entire financial profile, just like they would for a new loan application. If you meet their standards, they'll give you a release, which means the seller is no longer legally responsible. But lenders don't have to let you off the hook for liability. And some won't even if they agree with your assumption. This puts sellers in a bad spot. Let them assume without releasing and put their financial future at risk. Or don't assume and lose the marketing edge of an assumable loan. As the buyer, you should want the seller to get a release of liability because it shows that the lender has thoroughly checked and approved your financial qualifications. Sellers should never go through with any assumption if the lender won't agree to give them a release of liability at closing. It's not worth the risk of having your credit and finances ruined by someone else's payment problems on a house you don't own anymore. We strongly encourage sellers to get a release of liability and help with the paperwork process to make sure that everyone is protected in VA loan assumption transactions.
This is where it gets complicated. And the answer depends on whether or not you are using your own VA benefits as part of the assumption. If you're not a veteran and you take over someone else's VA loan, it won't affect your ability to get VA loans in the future at all. You can't get VA loans anyway. When you buy your next home, you'd look into conventional, FHA, or other types of loans. But if you're a veteran taking over another veteran's VA loan, you should think carefully about the situation. Yes, your entitlement will be charged to this new property if you replace your own VA entitlement with the seller's entitlement during assumption. The amount you have to pay depends on how much you owe on the loan. If you take out a $400,000 VA loan in 2025, about $100,000 of your entitlement would go toward that property. You can still get another VA loan in the future, though. But it does lower the amount of money you can spend on your next purchase. In standard-cost counties, most veterans can get up to $201,625, and in high-cost areas, they can get up to $302,437.50. If you borrowed $100,000, you still have $101,625 left in standard county. Without a down payment, lenders usually won't lend you more than four times what you can afford. So you could get a VA loan for up to about $406,500 without having to put any money down. Want a more expensive house? You'd have to put down a down payment to make up the difference. This is basically the same thing that happens to any veteran who has had a VA loan before. Your right to something doesn't go away. It's only partially tied up until the loans are paid off. One exception is if you take out a VA loan without giving up your entitlement. This can happen if you use up all of your entitlement and don't have enough for full substitution. In this case, the amount of money you can spend on future purchases depends on complicated math that takes into account both your assumed loan and your specific entitlement status. If you plan to use VA benefits again in the future, you should talk to a VA lender who knows what they're talking about before taking out any loans. They can figure out exactly how assumption would affect how much you can borrow in the future and help you decide if it makes sense for your long-term plans to buy a home. AmeriSave's VA loan experts can help veterans figure out how their assumptions will affect their future VA loan eligibility before they agree to any deal.
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