Assumable Mortgage Chicago Multifamily

Chicago · Member since 2021 · 12 posts · 13 votes

Hello All,
I'm on my second house hack in Chicago. My first was a 2 unit with an FHA and my second was a 4 unit with my VA. I have no entitlement left on my VA.

I was a bit interested in Assumable a loan for a property and know about most of the details, as well as bringing extra money to the table, I just wasn't sure if I would be able to assume an FHA or VA loan if I already have both and the VA entitlement was already maxed out.

1 Reply

90 views

Most Popular Reply

Brie SchmidtBusiness Member

Moderator

Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes

Quote from @Jonathan Klemm:

Great story so far @Michael Pienkowski! You are moving fast, which is most important in my playbook to get ahead. Where in Chicago are your two properties?

@Brie Schmidt nailed your question, I know you couldn't assume an FHA loan but didn't know the answer about VA (which makes sense) so glad I know the answer for next time. Thank you Brie!

FHA is assumable if you do not currently have one. He already has a FHA loan so can't have two.

Same with VA, it is assumable to another VA borrower as long as they have their entitlement available. He already has his in another property so the seller would have to forgo his entitlement to make is assumable.

The real issue with assumable loans right now is the down payment. I have come across a few and even listed one recently with a assumable loan but they need about 30% down because of the seller's equity position

Podcast Guest on Show #132

Second City Real Estate4.821 Reviews

Website View Page

1 Reply

See this reply in the discussion

6 Replies

Jump to latestLatest

Sort by

Brie SchmidtBusiness Member
Moderator
Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
2y
Quote from @Michael Pienkowski:

Hello All,
I'm on my second house hack in Chicago. My first was a 2 unit with an FHA and my second was a 4 unit with my VA. I have no entitlement left on my VA.

I was a bit interested in Assumable a loan for a property and know about most of the details, as well as bringing extra money to the table, I just wasn't sure if I would be able to assume an FHA or VA loan if I already have both and the VA entitlement was already maxed out.

No to FHA and maybe to VA. VA loans can be assumed by a non-VA buyer IF the original note holder is willing to forgo their entitlement until the loan is paid off. I have only seen it once where the seller was 80 and moving to a assisted living facility so he did not care about using his entitlement again.
You can also do the 5% down program up to 10 times
Podcast Guest on Show #132
Second City Real Estate4.821 Reviews
Website View Page
1 Reply
Michael Pienkowski
OP
Chicago · Member since 2021 · 12 posts · 13 votes
2y
Thanks for the insight Brie!
0 Reply
Jonathan KlemmBusiness Member
Moderator
Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes
2y
Great story so far @Michael Pienkowski! You are moving fast, which is most important in my playbook to get ahead. Where in Chicago are your two properties?

@Brie Schmidt nailed your question, I know you couldn't assume an FHA loan but didn't know the answer about VA (which makes sense) so glad I know the answer for next time. Thank you Brie!
[email protected]
Quality Builders4.966 Reviews
Website View Page
0 Reply
Brie SchmidtBusiness Member
Moderator
Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
2y
Quote from @Jonathan Klemm:

Great story so far @Michael Pienkowski! You are moving fast, which is most important in my playbook to get ahead. Where in Chicago are your two properties?

@Brie Schmidt nailed your question, I know you couldn't assume an FHA loan but didn't know the answer about VA (which makes sense) so glad I know the answer for next time. Thank you Brie!

FHA is assumable if you do not currently have one. He already has a FHA loan so can't have two.
Same with VA, it is assumable to another VA borrower as long as they have their entitlement available. He already has his in another property so the seller would have to forgo his entitlement to make is assumable.
The real issue with assumable loans right now is the down payment. I have come across a few and even listed one recently with a assumable loan but they need about 30% down because of the seller's equity position
Podcast Guest on Show #132
Second City Real Estate4.821 Reviews
Website View Page
1 Reply
Ryan ThomsonBusiness Member
Real Estate Agent · Colorado Springs, CO · Member since 2018 · 1k+ posts · 1k+ votes
6mo
Want to add some clarity here because the FHA point isn't quite right.
FHA loans ARE assumable. The fact that you already have an FHA loan doesn't prevent you from assuming someone else's FHA loan. What matters is: can you qualify as a borrower, and will the property be your primary residence? That's the lender's test, not whether you currently have FHA financing on another property.
So if you're planning to house hack again and live in the next unit, assuming a low-rate FHA loan is absolutely on the table.
Where it gets more complicated is the VA side. You already know your entitlement is gone, but the good news is you don't need any entitlement to ASSUME a VA loan. You're just stepping into the existing borrower's shoes. The issue is the veteran seller: by letting a non-veteran assume, they forfeit their entitlement until the loan is paid off or you refinance. Some sellers won't agree to that. But some will, especially if the assumable rate is the thing getting the deal done.
So to directly answer your question:
- **FHA assumption:** Yes, viable as long as it's your primary and you qualify credit/income-wise.
- **VA assumption:** Possible, but the seller has to be willing to lose entitlement. Worth asking. More sellers are open to it than you'd think because the sub-3% rate is what gets them top dollar.
The bigger challenge in Chicago is just inventory. FHA/VA assumables are mostly SFRs and small multifamily. Not a ton of 3-4 unit VA deals out there, but they exist. I'd set a search in your MLS for "assumable" in the remarks and check back regularly.
The Assumable Guy544 Reviews
Website View Page
0 Reply
Henry Lazerow
Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes
6mo
I brokered a deal where buyer did a VA assumption last year it was pretty simple process. As long as the seller is willing to give up their entitlement, you should be fine.

As Brie said the big issue is the equity. I have a 3 listed right now where its got a VA 2.25% but takes nearly 400k down to do it and seller only wants veteran buyers to not lose entitlement, not too many out there with 400k to place down. The best assumption deals are where buyer is doing a 1031 and has a ton of equity they are trying to place into a deal.
0 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.