VA loan assumptions are one of the most overlooked opportunities in real estate right now. I’ve just gone through a VA assumption on this home, so here’s what you really need to know.
1. A buyer can assume the seller’s VA loan. This means the buyer takes over the loan balance and the interest rate. My seller had a 2.75% rate. In a 6% market, that was a huge selling point—and the buyer jumped at it.
2. The buyer still needs lender and VA approval. Assuming a VA loan isn’t automatic—the buyer will go through a full loan approval process with the lender, just like any other mortgage. And keep in mind: the buyer will need to bring the difference between the purchase price and the remaining loan balance in cash at closing. It takes some upfront work, but the long-term savings can be well worth it.
3. VA assumptions can take longer than a normal loan, but they don’t have to. Most lenders do not have a dedicated department for VA assumptions. Because of this, if you’re not checking in regularly, it can drag out. We had to stay on top of the lender this whole transaction to ensure we closed in a timely manner. If you’re doing an assumption, stay involved and follow up often. Also plan for a 45 – 60 day close time.
4. Sellers—protect your VA entitlement. If you let a non-veteran assume your VA loan, your entitlement stays tied up until the loan is paid off. In our case, the buyer was a military member as well and used their VA entitlement to assume the loan. My seller worked with the lender to get a release of liability, but this step is often overlooked. Don’t skip it if you plan to use your VA benefit again on another home.
5. VA assumptions are secret weapons in this market. Assumable loans can make your listing stand out and save a buyer thousands. VA loan assumptions do not require an appraisl – removing a stressful hurdle for a seller. Most people don’t even know to ask. If you are a VA buyer, tell your agent to start asking—and if you’re a seller, advertise your assumability.
I’ve done one of these VA assumptions recently, and while it takes effort, the payoff is absolutely worth it. Do you have questions about how to do it right? Reach out at 904-419-8441 or below.
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