How to Assume a VA Loan: Step-by-Step Guide

VA loan assumptions are the single biggest opportunity in real estate right now. And I'm going to walk you through exactly how the process works, step by step.

Quick background: VA loans are mortgages guaranteed by the Department of Veterans Affairs. They're available to active-duty military, veterans, and eligible surviving spouses. And by law, every VA loan is assumable.

Here's the part that surprises people: you don't have to be a veteran to assume a VA loan. Any qualified buyer can do it.

Step 1: Understand What You're Getting Into

When you assume a VA loan, you're taking over the seller's existing mortgage. Their rate, their remaining balance, their remaining term. The loan transfers from their name to yours, with the lender's full knowledge and approval.

This is not subject-to. Subject-to is when someone takes over payments without the lender knowing. An assumption is fully above board. The lender reviews your qualifications, approves the transfer, and updates the loan documents.

What you're really doing is reaching back in time and grabbing a rate from 2020 or 2021. A rate that should not be possible to get today. But it is.

Step 2: Check Your Qualifications

For a VA assumption, the lender will review:

• Credit history: No minimum credit score for VA assumptions, but 620+ makes things smoother.
• Income and employment: You need stable income that supports the monthly payment.
• Debt-to-income ratio: Generally want to stay under 41%, though some flexibility exists.

If you are a veteran yourself, you can use your own VA eligibility, which gives the seller back their entitlement. If you are a non-veteran, the seller entitlement stays tied to the loan until you pay it off or refinance. About 10-20% of VA sellers are open to non-veteran assumptions.

Step 3: Find an Assumable VA Property

This is where most people get stuck. Assumable properties are not always easy to find because most listing agents do not mention the assumable loan in the listing. That is literally why I built this business. I track every assumable property in Colorado with over 1,100 listings.

When searching, look for properties with FHA or VA loan types, purchase dates between 2019-2022 (prime low-rate window), and government-backed financing.

Step 4: Make an Offer

Your offer should include an assumption contingency, equity gap coverage (cash or second mortgage), and a realistic 45-90 day closing timeline. A good assumption processor will help you structure this properly.

Step 5: Submit the Assumption Package

Once your offer is accepted, submit an assumption package to the loan servicer including your loan application, income verification, asset verification, credit authorization, and a copy of the purchase agreement.

Companies like UMe and Roam have built relationships with servicers and know how to keep things moving when the servicer adds friction. The law says servicers have to allow assumptions, but they would rather keep collecting interest at higher rates.

Step 6: Underwriting and Approval

The servicer reviews your package like a regular mortgage application. Timeline: typically 30-60 days. Respond quickly to any requests for additional documentation, as every delay extends the timeline.

Step 7: Closing

Once approved, you will close just like a regular real estate transaction. You will pay the equity gap, an assumption fee (typically $300-$500 for VA loans), the processor fee, and standard closing costs. No origination fees, no lender fees, no appraisal in many cases.

Step 8: Move In and Start Saving

The loan is yours. On a $400K loan, the difference between 2.75% and 7% is roughly $1,100 per month, $13,200 per year, and over $330,000 in savings over 25 years.

Common Concerns

Can the process fall apart? Yes, just like any mortgage application. But the savings make it worth it.

What if I am not a veteran? You can still assume. Many sellers are open to it.

What about the equity gap? Second mortgages are available with as little as 5% down.

Ryan Thomson is an assumable mortgage specialist at Keller Williams Advantage in Colorado Springs. Find assumable listings at assumableguy.com