VA Home Loan Assumption
Videos feature Tim Lewis, VA Loan Team Manager, NMLS #157603.
How does assuming a VA home loan work?
One of the great features of the VA mortgage program is that loans are assumable with credit qualification. When a VA borrower sells a home to another VA-eligible borrower, often times the loan can be assumed. VA home loan assumption can happen two ways. The seller can allow his or her entitlement, originally used to acquire the VA loan that is being assumed, to be used by the buyer. In this scenario, the seller will be unable to restore this entitlement until the buyer pays the loan in full. Another scenario is for the VA buyer to substitute his or her own entitlement for the seller's in order to assume the loan. This allows the seller to restore entitlement immediately to use on another VA mortgage if he or she wishes. Of course, appropriate VA forms would need to be completed for entitlement to be restored. Whether entitlement is replaced or not, a VA loan can only be assumed by another VA-eligible borrower.
If you or someone you know is interested in assuming a VA loan, a VA mortgage professional can provide more facts about how to do so.
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