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VA Assumability: What in the Heck is It?

Updated: Jan 31, 2022

What is VA Assumability? In nearly every home purchase, the applicant has to apply for an original loan. This is pretty cut and dry... However, in VA loans, there is something called VA assumability. This is a fancy way of saying that a veteran or ordinary citizen can claim an existing VA loan for a home. That's crazy, right? When has something like this ever been allowed to happen. This is what VA assumability is and continue reading below to learn how it works. If you're a realtor, click here to download this free resource explaining VA assumability to your clients.

Who Can Assume? Military veterans eligible for VA loans, their spouses, and citizens can all assume another VA loan.

How Does it Work? The process is started and completed through the loan servicer. The loan servicer is the entity that the applicant will be making monthly loan payments to. The only stipulation is that the buyer will need to prove that they can afford the monthly payments. They also must cover the funding and assumption fee?

Pros of VA Assumability

  • It's easier to appeal in a buyer's market.

  • There is a lower and easier fee (appraisal, closing costs, etc.)

  • It's also more convenient to appeal in a higher rate market to a buyer who would like a lower interest rate.

Cons of VA Assumability

  • The veteran can lose their eligibility to open another VA loan until the original home is paid off.

  • This is a much longer process.

What Should You Do? If you're a realtor, this may be an interesting piece of information you can share with your clients. With that said, click here to download this free resource to easily relay the message in your SOI. If you're a potential buyer, give us a call at (901) 759-4400 or click here to find a Loan Officer to learn more about how you can continue.

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