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VA Assumable Loan Mysteries: 10 Crazy Facts You Must Know

What is a VA assumable loan? Purchasing a home is a significant decision, and understanding all the options available can be a game changer. One particular financing option that might be overlooked is the VA assumable loan. In this comprehensive article, we’ll reveal the ins and outs of VA assumable loans and help you decide if this type of mortgage is the right choice for you. So, sit tight as we provide you with a brief history, intriguing statistics, some interesting trivia, and FAQs related to VA assumable loans.

Va Loan Assumption

📜 History of VA Assumable Loans

The origins of VA loans can be traced back to the Servicemen’s Readjustment Act of 1944, signed by President Franklin D. Roosevelt. The goal of this Act was to provide a range of benefits to returning war veterans, including affordable mortgages through the Veterans Affairs (VA).

Since then, VA loans have become a popular option for service members, military families, and veterans due to their favorable terms and conditions, such as low or no downpayment requirements, and less strict credit guidelines. Among the benefits of VA loans is the feature of being an assumable loan. This means that the buyer can take over – or “assume” – the seller’s mortgage under the same loan terms as initially agreed upon by the seller.

📈 VA Assumable Loan and VA Loan Assumption Statistics

VA assumable loans are gaining in popularity and for a good reason. Here are some compelling statistics to give you an idea of the larger picture:

  • According to the VA Home Loan Centers, in 2021, there were approximately 7.5 million VA loans outstanding.
  • The VA Guaranteed Home Loan Program has helped more than 22 million service members, veterans, and eligible surviving spouses become homeowners.
  • As of December 2020, the average VA loan size stood at $292,071.
  • Based on recent data, approximately 35,000 to 40,000 VA loans are assumed each year.

🧩 VA Assumable Loan Trivia

  1. VA loans are more favorable for active-duty military, veterans, and spouses than comparable conventional home loans because they have lower credit score requirements, no PMI (Private Mortgage Insurance), and discounted to zero-down payment options.

  2. VA loans can be assumed not only by other eligible veterans or military members but also by a non-veteran if the VA mortgage is 30 days or more past due. But the new borrower must still meet the lender’s credit and income requirements.

Are Va Loans Assumable

❶ Understanding the VA Assumable Loan Process

Assuming a VA loan is not as complicated as it might seem at first glance. Here are the steps involved in the process:

  1. First, the buyer who wishes to assume the VA loan must obtain the seller’s mortgage information and VA case number.
  2. The buyer needs to apply for the assumption by submitting an application package to the lender, including a sales contract, documentation of income, credit report, and other necessary information.
  3. The lender will then review the buyer’s application and determine if they are eligible for the loan assumption. If approved, the lender will notify both the buyer and the seller.
  4. Once the assumption is approved, the buyer and seller should attend the closing appointment to finalize the transaction.

Keep in mind that the applicable fees and closing costs are the borrower’s responsibility, just like in a traditional mortgage.

❷ VA Assumable Loan Eligibility

Borrowers need to meet specific eligibility criteria to assume a VA loan. These include:

  • Being a qualifying veteran, a service member, or a surviving spouse.
  • Meeting the lender’s credit and income requirements.
  • Assuming the loan within the VA loan limits.

However, even non-veterans can assume a VA loan if the mortgage is 30 days or more past due and the buyer meets specific credit requirements.

❸ Are VA Loans Always Assumable?

While most VA loans created after 1988 are assumable, specific requirements need to be met in each case. If a loan was closed before March 1, 1988, there may not be restrictions on the loan assumption, but the VA’s approval will still be required. The key is to review the loan agreement with the lender and obtain professional guidance if needed.

❹ Pros and Cons of VA Assumable Loans for Buyers


  1. An assumable loan may offer a lower interest rate than prevailing market rates, especially if the existing loan originated when interest rates were low.
  2. Credit requirements are often more manageable for buyers with less-than-stellar credit.
  3. Assuming a loan can save on closing costs, as there’s no need to originate a new mortgage.


  1. If the seller has a large amount of home equity, the buyer will need a sizable downpayment.
  2. VA financing may not cover the closing costs, and the buyer will have to pay them out-of-pocket.
  3. Not all lenders will allow a VA loan assumption, which can limit your options.

❺ Advantages and Disadvantages of VA Assumable Loans for Sellers


  1. Sellers might enjoy a quicker sale if they offer an assumable mortgage, as it may attract more potential buyers.
  2. An assumable VA mortgage can relieve sellers of their mortgage responsibility – but only if the buyer takes full responsibility for the loan.
  3. If the interest rate on the assumed loan is lower than the current rates, the property’s value may rise.


  1. Once the property is sold, the seller’s eligibility for future VA loans is restored. However, if the buyer defaults on the assumed mortgage, the seller’s eligibility may be affected.
  2. The loan assumability feature might not appeal to everyone, limiting the pool of potential buyers.

❻ VA Funding Fee and Other Potential Costs

When a buyer assumes a VA loan, they’ll be responsible for the VA funding fee. This one-time fee helps offset the cost of defaulted loans and is used to support the VA Home Loan Program. For specific information on the VA funding fee, visit this helpful chart.

Keep in mind that the buyer is also responsible for other costs, such as:

  • Closing costs: As mentioned earlier, although the closing costs for a VA loan assumption might be lower than a traditional mortgage, there are still costs associated with closing the loan.
  • Appraisal fees.
  • Lender’s fees, such as processing and underwriting fees.
  • Potential prepayment penalties on the original loan.
Va Assumable Loans

⟰ Is a VA Loan Assumable After a Death?

Yes, VA loans can be assumed by family members or joint homeowners in case of the original borrower’s death.

❓ Frequently Asked Questions (FAQs)

Q: Who can assume a VA loan?

A: VA loans can be assumed by eligible veterans, service members, and surviving spouses. If a mortgage is 30 days or more past due, even non-veterans can assume a VA loan if they meet specific criteria.

Q: Can all VA loans be assumed?

A: Most VA loans granted after 1988 can be assumed, provided all the requirements are met. However, it’s critical to consult your loan agreement and discuss the matter with a professional expert.

Q: Is assuming a VA loan a good idea?

A: Assuming a VA loan can be a great idea for buyers seeking favorable interest rates, lower credit requirements, and minimum downpayment options. However, it’s imperative to carefully consider the potential downsides and weigh your options before making a decision.

In conclusion, a VA assumable loan can be an attractive option for many buyers and sellers, offering distinct advantages over traditional mortgages. By understanding the ins and outs of VA assumable loans, borrowers can make an informed decision on whether this type of mortgage fits their needs.

Mortgage Rater Editorial, led by seasoned professionals with over 20 years of experience in the finance industry, offers comprehensive information on various financial topics. With the best Mortgage Rates, home finance, investments, home loans, FHA loans, VA loans, 30 Year Fixed rates, no-interest loans, and more. Dedicated to educating and empowering clients across the United States, the editorial team leverages their expertise to guide readers towards informed financial and mortgage decisions.
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