Assumable VA Loans: Should Veterans Say Yes or No?

Assumable VA Loans: Should Veterans Say Yes or No?

If you're a veteran with a VA loan, you may have heard whispers about one of the best-kept secrets in real estate: assumable VA loans. In today’s market of rising interest rates, these gems can offer serious leverage for both sellers and buyers. But before you say “yes” to letting someone assume your loan, it’s important to understand what that really means—especially for your financial liability.

Let’s break it down:

What Is an Assumable VA Loan?

An assumable loan means a buyer can take over your mortgage, keeping your current interest rate and loan terms. With interest rates much higher today than they were a few years ago, a buyer may see your low 2.5%-3.5% VA loan as gold.

The VA allows loan assumption under certain conditions. Whether you’re selling your home or just considering your options, this can be a big deal.

Liability: The Number One Thing Veterans Must Understand

Here’s where it gets real: If your VA loan is assumed and not handled correctly, you could still be on the hook for the loan—even if someone else is living in the home.

If the buyer does not qualify through the lender or VA process, and they default later, you may be responsible for the balance. That can hurt your credit, impact your ability to get another VA loan, and come back to haunt you years down the road.

Tip: Make sure the assumption is approved through the lender and the VA, and that your entitlement is restored or substituted, depending on who assumes the loan.

Pros of Allowing a VA Loan Assumption

• Big buyer incentive: In today’s rate environment, buyers love low-rate assumable loans. This can help your home sell faster—and sometimes for more.

• Lower closing costs: Assumptions can skip some traditional lending fees, making the deal smoother and cheaper for the buyer.

• Faster close: These deals may move more quickly, especially if the buyer is well-qualified.

Cons (and Risks) to Consider

• Ongoing liability: If you don’t get a release of liability, you’re still responsible.

• Loss of VA entitlement: Unless the buyer is a veteran and agrees to substitute their entitlement, part of yours will be tied up until the loan is paid off. That could limit your future VA home-buying power.

• Credit risk: If the new buyer defaults and the loan is still in your name, your credit score takes the hit.

Should You Allow It?

Here’s the short version:

• Yes, if the buyer is approved by your lender/VA and you're released from liability.

• Maybe, if you're okay with your entitlement being tied up for a while.

• No, if the assumption is informal or you won’t be released from responsibility.

Final Thoughts: Protect Your Future

Assumable VA loans are an incredible tool in a shifting market—but only when handled the right way. As a veteran, you’ve earned the right to use this powerful loan benefit. Just don’t let it become a burden by skipping steps or making a handshake deal.

Always work with a real estate agent or advisor who understands VA loans—someone who can guide both you and the buyer through the process safely.

Have questions about how to market your assumable VA loan—or whether it’s the right move? Reach out. We’ll help you make the smart choice that honors your service and protects your future.

Don't forget to check out our program for Veterans as we proudly support Tunnel to Towers - see our program at www.HeroesMLS.com

Listen to our radio show, which Ro has hosted since 2012, with the VP of Tunnel to Towers - and grab a tissue! One of my favorite shows.

Discover the extraordinary mission of the Tunnel to Towers Foundation as we hear from Gavin Naples, Vice President of the Homeless Veterans Program. Gavin shares the impactful work being done to support America's heroes, including providing mortgage-free homes to veterans and first responders. With powerful endorsements from public figures like Jelly Roll and Cole Hauser, this episode promises insights into how the foundation is making a real difference and how you can be a part of it.

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