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VA Loan Assumption – What You Need to Know

Buying a home is a significant investment decision, and one that can have long-term financial ramifications. One of the most popular ways to finance a home purchase in the United States is through a VA loan. A VA loan is a type of mortgage that is backed by the Department of Veterans Affairs, and it is designed to help veterans and active-duty military personnel purchase a home.

But what happens if you want to sell the home that you financed with a VA loan? Can someone else assume the loan, or do you need to pay it off before selling? In this article, we’ll take a closer look at VA loan assumption and what you need to know.

What is VA Loan Assumption?

VA loan assumption is the process of having a new borrower take over the remaining balance of your VA home loan. In other words, if you currently have a VA loan on your home, you can sell the property and transfer the loan to the buyer. The buyer will then take over making the remaining payments on the loan, while you, as the seller, are released from your obligation to repay the loan.

In order to assume a VA loan, the buyer must meet certain eligibility requirements. First and foremost, they must be a qualified veteran, active-duty service member, or eligible surviving spouse. They must also have sufficient income and credit to be able to make the mortgage payments.

The Benefits of VA Loan Assumption

One of the main benefits of VA loan assumption is that it can make it easier to sell your home. Rather than having to pay off the loan and start fresh with a new buyer, you can transfer the loan to them and avoid many of the closing costs and fees that come with refinancing or getting a new loan.

Another benefit of VA loan assumption is that it can make your home more attractive to buyers. A VA loan is a government-backed loan, which means that it offers certain advantages and protections for the borrower, such as lower interest rates and no down payment requirements. By allowing a buyer to assume the loan, you are making it easier for them to qualify for those benefits and purchase your home.

The Risks of VA Loan Assumption

There are also some risks associated with VA loan assumption that you should be aware of. One of the biggest risks is that you may still be liable for the loan if the buyer defaults on their payments. While the buyer is responsible for making the payments, you are still the primary borrower, and the lender can come after you if they do not receive payment.

Another risk is that VA loan assumption may not be possible in all cases. For example, if interest rates have risen significantly since you obtained your loan, the buyer may not be able to assume the loan without paying a higher interest rate than they would like.

The Process of VA Loan Assumption

If you are interested in VA loan assumption, there are a few steps that you will need to follow. First, you will need to contact your lender and let them know that you are interested in transferring the loan to a new buyer.

Your lender will then review the buyer’s eligibility and creditworthiness to determine whether they meet the requirements for VA loan assumption. If the buyer is approved, you and the buyer will need to sign an assumption agreement and complete all of the necessary paperwork to transfer the loan.

Once the loan has been transferred, the buyer will begin making payments and assuming responsibility for the loan. In the meantime, you will be released from your obligation to repay the loan, and you can use the proceeds from the sale of the home to pay off other debts or make a new investment.


VA loan assumption can be a convenient and cost-effective way to sell your home and transfer your VA loan to a new borrower. However, it is important to be aware of the risks and eligibility requirements associated with VA loan assumption before deciding to go this route.

If you have any questions about VA loan assumption or would like to explore other options for selling your home, it is recommended that you speak with a qualified real estate professional or financial advisor who can guide you through the process and help you make an informed decision.

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