Your Complete Guide to Successful Assumptions

Andrew Georgitsis
Sep 19
3 min read

🌟 Why Assumable Loans Matter Right Now

With interest rates still high for new mortgages, assumable loans have become one of the best-kept secrets in real estate. They allow qualified buyers to step into an existing low-rate mortgage, and they give sellers a powerful marketing edge. Yet many buyers and sellers don’t fully understand how assumptions work. This fact sheet — and this post — break it down step by step.

1️⃣ What’s an Assumable Mortgage?

An assumable mortgage is a government-backed loan that can be transferred from a seller to a purchaser at the same interest rate and terms. Instead of applying for a brand-new mortgage at today’s higher rates, the buyer “assumes” the seller’s current mortgage and continues paying at the original rate — sometimes as low as 2.5%.

2️⃣ What Types of Mortgages Are Assumable?

VA loans, FHA loans, and USDA loans are all assumable. Each of these government-backed programs allows qualified buyers to take over the loan, subject to lender approval.

3️⃣ Who Can Qualify for an Assumable Mortgage?

Any buyer who meets the financial eligibility criteria for a VA, FHA, or USDA loan may qualify. Importantly, non-veterans can also assume a VA loan if they meet the financial requirements and the seller agrees to leave their entitlement with the property.

4️⃣ What If the Buyer Needs Cash for the Down Payment?

If the home’s price exceeds the remaining balance on the assumable loan, the buyer covers the difference with cash or a second mortgage. Today, certain lenders offer purchase-HELOC products and other tailored solutions to help buyers cover that gap with favorable terms.

5️⃣ How Long Does an Assumption Take?

It’s usually faster than people think. VA and FHA guidelines require servicers to review assumption applications within 45 days of receiving all documentation. In practice, VA assumptions typically close in 30–60 days, and FHA assumptions usually close in 45–75 days from contract ratification.

6️⃣ Who Can Assume a VA Mortgage?

Any qualified buyer — including non-veterans and investors — can assume a VA loan. For non-veterans or investors, the seller must be willing to leave their VA entitlement with the property. Roughly one-third of sellers do exactly that to attract more buyers.

7️⃣ Common Reasons Sellers Leave Their VA Entitlement

They only have a portion of their entitlement tied up and can still buy another home.
They’re moving into a new property with enough equity to purchase outright.
They’re retiring, relocating, or moving into family or elder care housing.
They’re a married pair of veterans and one spouse’s entitlement will cover the next home.

These scenarios make VA-financed homes with assumable loans especially attractive to buyers.

8️⃣ How Assumptions Affect Sellers

Assumptions are often great for sellers:

They draw more buyer interest.
Homes with assumable loans tend to sell faster and at a higher price.
Sellers have zero liability for the mortgage once the assumption is complete.
Buyers are motivated to help the process go smoothly because the low rate is so valuable.

9️⃣ Can an Investor Assume a Mortgage?

Yes. Investors can assume VA mortgages under the same conditions as non-veteran buyers, and FHA loans can be assumed too. FHA does require the buyer to live in the home for 12 months after purchase; after that, the home can be rented.

🎯 The Bottom Line

Assumable loans are one of the best tools in today’s market. They allow buyers to lock in much lower rates than new mortgages, and they give sellers a marketing advantage that can mean more money and faster closings.

At SoCal Realty & Investments, we’re the local experts on VA, FHA, and USDA assumable loans. We’ve built a search tool to show you which homes currently have assumable mortgages, and we guide both buyers and sellers through every step. https://www.socalrealtyandinvestments.com/assumable-loans