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Selling Your Home as a Veteran: Understanding VA Loan Assumptions
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If you're a veteran thinking about selling, you may have something most sellers can't offer: a buyer may be able to take over your low rate VA loan. In a higher rate market, that can attract more buyers and help your home sell faster, sometimes for more.
What Is a VA Loan Assumption?
A buyer takes over your existing VA loan, including the interest rate, balance, and remaining term. If you locked in a low rate years ago, that rate can transfer to your buyer, which can save them hundreds a month.
Who Can Assume Your VA Loan?
- Veterans and service members who qualify for VA benefits, and who can substitute their entitlement for yours.
- Non veterans who qualify with the servicer. In that case, your entitlement stays tied to the home until the loan is paid off.
The Benefits to You
A Market Advantage
A low rate assumable loan is a standout feature in a higher rate market.
Potentially a Higher Price
Buyers may pay more for the benefit of your lower rate.
A Faster Sale
Standing out from competing homes can shorten your time on market.
A Larger Buyer Pool
Buyers who can't afford today's payments at new rates may be able to afford yours.
The Assumption Process
Check With Your Servicer
Confirm your loan is assumable and get their guidelines and timeline.
Market the Loan
Advertise the rate, estimated payment savings, and how buyers qualify.
Qualify the Buyer
The buyer applies with your servicer and must meet credit and income requirements.
Approval
The servicer approves the assumption, often in 45 to 90 days or more.
Close and Protect Your Benefit
Get a release of liability, and if your buyer is a veteran, request entitlement substitution so your benefit is restored.
Important Considerations
- The equity gap: if your balance is less than the price, the buyer covers the difference with cash or a second loan.
- Entitlement: selling to a non veteran ties up part of your benefit until the loan is paid off.
- Fees: the VA funding fee on an assumption is 0.5%, and servicer processing fees are limited.
Bottom line: if you have a low rate VA loan, offering it as assumable can give you a real competitive edge. See how we market assumable homes.
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Frequently Asked Questions
Can I sell my home and let the buyer assume my VA loan?
Yes. VA loans are assumable with approval from your loan servicer. The buyer takes over your rate, balance, and remaining term.
What happens to my VA entitlement if my loan is assumed?
If a non veteran assumes it, your entitlement stays tied to the loan until it's paid off. If the buyer is a veteran who substitutes their entitlement, yours is restored.
How long does a VA loan assumption take?
Often 45 to 90 days or more, depending on the servicer.
Should I get a release of liability?
Yes. Make sure the servicer releases you from liability for the loan when the assumption closes.
More Guides for Veterans
Meet Your Veteran Realtor
Troy Doty, Principal Broker
Troy Doty is a Principal Broker with Northwest Realty Source in Portland, with 25 years in real estate and over 1,000 homes sold across the Portland metro and SW Washington. As a Marine Corps veteran, Troy has a true passion for helping Portland veterans and active duty military families buy and sell homes, whether you're PCSing in, transitioning out, buying your first home, investing in a duplex, triplex, or fourplex, or right sizing later in life.
Schedule a Call or Video Meeting ➜ More About Troy ➜ Free Veteran Buyer E-BookPrefer to call or email? 503.997.4169 · troy@nwrealtysource.com
Troy Doty, Principal Broker, Northwest Realty Source. Licensed in Oregon and Washington. ABR®, MRP, and SRES® are credentials of the National Association of REALTORS® and its affiliates. CIAS™ is a designation of U.S. Realty Training. This page is general information, not legal, tax, or lending advice.
