Are VA Loans Assumable?

VA loans are assumable regardless of whether you’re a veteran or active service member. This means you can take over an active VA loan from a current homeowner, benefiting from their existing interest rate and loan terms, without additional mortgage insurance costs.

Assuming a VA loan instead of taking on a new mortgage, when interest rates are high, can offer significant money-saving benefits to homebuyers. We’ll guide you through all you need to know about VA assumable mortgages and how to find an assumable VA loan.

What is a VA assumable loan?

A VA assumable loan is a mortgage backed by the Department of Veterans Affairs that a qualified buyer takes over from the current homeowner, with the loan’s original terms unchanged. By assuming the responsibility for the remaining loan balance, you release the original borrower from their liability. In exchange, you get to keep the original VA loan’s interest rate, repayment period, and other loan terms without needing to be a qualified veteran or active service member. 

How does an assumable VA loan work?

Assumable VA loans transfer the mortgage responsibility from the current homeowner to the buyer. All VA loans originated on or after March 1, 1988 are not freely assumable. Buyers are subject to the VA lender’s eligibility criteria, including creditworthiness, proof of income and employment, and a potential down payment.

Who can assume a VA loan?

Anyone who is able to meet the VA lender’s eligibility criteria can assume a VA loan. This includes non-military civilians, active-duty service members, veterans, surviving spouses of veterans, and Reserve or National Guard members.

Buyer VA loan requirements

When assuming a VA loan, buyers are subject to the lender’s qualification criteria, which may include:

• Having a minimum 620 credit score
• Having a debt-to-income ratio (DTI) of 41% or less
• Providing proof of income and employment through recent pay stubs, banking statements, and W2 tax returns
• Obtaining a Certificate of Eligibility (COE), if you’re a veteran or active-duty service member
• Exchanging your VA loan entitlement with the seller, if applicable
• Making a down payment that covers the seller’s existing home equity, which is the home’s current market value minus the remaining principal loan balance
• Paying an assumption fee to the lender

Seller VA loan requirements

VA loan assumption requirements for sellers typically include:

• Verifying and obtaining permission from the lender to proceed with the loan assumption
• Ensuring you have a 12-month history of making on-time mortgage payments
• Securing a release of liability, which is a document that all parties must sign at closing to ensure you’re no longer responsible for the mortgage upon assumption
• Paying a VA funding fee within 15 days of the loan being assumed, which is 0.5% of the remaining loan balance

Are all VA loans assumable?

While all VA loans are assumable, they’re not all automatically assumable. VA lenders are required to process all requests for assumptions, but they are not required to grant approval. This is because VA loans originated on or after March 1, 1988 are subject to VA approval and lender policies, which means you must meet the eligibility criteria to assume the loan. 

How assuming a VA loan impacts the seller

Assuming a VA loan affects the seller’s VA borrower entitlement benefit, which refers to the maximum amount the VA will guarantee on a VA loan. VA borrower entitlement is reduced after taking out a VA loan until the original loan is repaid. This can impact the seller’s ability to obtain another VA loan or the amount they’ll be approved for — regardless of who owns the loan. If the buyer who assumes the loan is an eligible service member with full entitlement, the buyer may agree to substitute their entitlement to restore the seller’s entitlement benefit upon assumption.

How to assume a VA loan

When it comes to finding a VA loan with Zillow, visit our page of homes for sale and follow these steps:

• Reset your filters: Go to the top right corner of the page and click on filters. Once you open the filter section, click reset.
• Search a location: Enter the location where you want to search for a home.
• Filter by a keyword: Go back to the filters section and scroll down to the keywords section at the bottom. Type the word “ASSUM” (without the E) into the keyword box. This will allow you to pick up all the homes with assumable mortgages in your preferred location.
• Find a home with a VA assumable mortgage: Return to the Zillow map and zoom in on your area. All listings in your area of choice will now include the word “assume” in the comments, meaning the homes being sold offer an assumable mortgage.

You can also get help from one of our local Premier Agent partners to find homes with assumable VA loans in the neighborhoods you like.