Are VA Loans Assumable? (2026 Buyer Guide)

If you are buying a home and worried about high mortgage rates, taking over a VA loan could save you money by securing a lower-interest loan.

This lets you use the seller’s lower interest rate, making payments more affordable. VA loans often have interest rates of 0.25% lower than conventional or FHA loans.

For example, if a seller has a 3% interest rate on their VA loan, but current rates are above 6% then by assuming the seller’s loan, you could get that lower mortgage rate. It makes monthly mortgage payments easier to handle.

We will explain what the VA loan assumption is, who can use it, and how it works. In addition, we will discuss the pros and cons to help you decide if it’s the best choice for you.

A VA assumable loan lets a buyer take over the terms of an existing VA loan, as long as they can qualify for that loan . This means the buyer will have the same mortgage terms, such as interest rate, payment amount, and repayment terms as the seller. If the seller had a low interest rate, the buyer could benefit by keeping that rate. Unlike most regular loans, which can’t be assumed by someone else, VA loans allow this. Since VA loans are supported by the U.S. Department of Veterans Affairs, they often come with helpful benefits and protections for VA Home Loan eligible consumers.

Only veterans can be granted a new VA loan. However, if you are assuming a VA mortgage, military experience is not required. Instead, you need to provide financial documents and meet the lender’s requirements.

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Yes, VA loans are assumable. If you have an assumable VA loan and are thinking about using loan assumption as part of your home sale, it’s important to first understand your rights and how it might impact your VA loan entitlement.

For buyers, it’s wise to speak with a VA-approved lender and carefully evaluate whether assuming a VA loan is the right choice. Taking these steps can help you make a well-informed decision.

If you’re a buyer looking to assume a VA loan, you must meet specific lender requirements. There is no maximum debt-to-income (DTI) ratio set by the VA; and residual income is often used to offset higher borrower DTIs. You must also meet the VA’s residual income requirements, which vary based on factors such as location, family size, and loan amount.

Non-military borrowers can assume a VA loan, but lender approval is necessary. Unlike obtaining a new mortgage, you’ll need to work with the seller’s lender to prove your creditworthiness. If approved, you can proceed with the loan assumption. Note that there is a 0.5% funding fee based on the loan balance.

Finally, be aware that each lender may have different standards, so you could encounter varying financial requirements, including higher credit score thresholds.

You just need to inform the seller and the VA lender, then follow these steps:

• Start the Process: The seller’s Loan Servicer will help you fill out all the paperwork. Once you provide your documents, they will check your credit and income to ensure you can repay the loan.

• Approval and Signing: The VA lender will look over everything. If you are approved, you and the seller will sign the necessary papers to complete the process.

• Get a Release from the VA: After your application is approved, you need to get a release from the Department of Veterans Affairs. This makes sure the seller is no longer responsible for the loan.

If a non-military person takes over your VA loan, your VA loan benefits won’t be restored until the home is sold or financed out of the original loan and the loan is fully paid. But here’s some good news: if the person taking over your loan is an eligible military borrower, then their entitlement will replace yours and you will be eligible to use your VA benefit again. When you ask for the transfer, you can also ask the VA to restore your benefits so you can use them to buy a new home.

Also, make sure your lender releases you from the loan responsibility when it is taken over. If not, any late payments by the new borrower could hurt your credit score.

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Here are the pros and cons of VA loan assumption:

• You don’t need to be an active-duty military member, veteran, or surviving spouse to assume a VA loan.

• The VA funding fee and closing costs are lower compared to applying for a new loan.

• You might get a lower mortgage rate, especially if current rates are higher than when the original loan was made.

• There’s no fee for paying off the loan early because VA rules prevent lenders from charging these fees.

• A down payment may be needed if the home's price is higher than the remaining loan balance.

• The seller cannot get another VA loan until the assumed loan is fully paid off unless the buyer uses their own VA entitlement.

Thinking about buying a new home? Taking over a VA loan from a seller can give you lower interest rates and help you save money, making it easier to afford your dream home.

VA home loans can be transferred to new buyers, and they often come with lower interest rates. This can make them a good choice for some people. But for others, a different type of loan might work better.

Before making a decision, take some time to think about the good and bad points of this option to see if it’s right for you.