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 shouldn't be possible to get today. But it is.

Step 2: Check Your Qualifications

For a VA assumption, the lender will review:

• **Credit history:** There's technically no minimum credit score for VA assumptions. But the lender looks at your overall credit picture. A 620+ score makes things smoother. If your score is lower, it's the reason behind it that matters.
• **Income and employment:** You need to show stable income that supports the monthly payment. Standard stuff.
• **Debt-to-income ratio:** Generally want to stay under 41%, though some flexibility exists.

If you're a veteran yourself, you can use your own VA eligibility, which gives the seller back their entitlement. If you're a non-veteran, the seller's entitlement stays tied to the loan until you pay it off or refinance.

This is important for sellers to understand, and it's why about 10-20% of VA sellers are open to non-veteran assumptions. We call the willing ones "hand raisers."

Step 3: Find an Assumable VA Property

This is where most people get stuck. Assumable properties aren't always easy to find because most listing agents don't mention the assumable loan in the listing.

That's literally why I built this business. I track every assumable property in Colorado. Right now, I'm monitoring over 1,100 listings with assumable VA, FHA, and USDA loans.

When you're searching, look for properties with:

• FHA or VA loan types (sometimes mentioned in the MLS notes)
• Purchase dates between 2019-2022 (prime low-rate window)
• Government-backed financing indicators

Or just let me do the work for you. That's kind of the whole point.

Step 4: Make an Offer

Your offer looks similar to a standard purchase offer, with some key additions:

• **Assumption contingency:** Your offer is contingent on successful assumption of the existing loan.
• **Equity gap coverage:** You'll outline how you're covering the gap between the purchase price and the loan balance (cash, second mortgage, etc.).
• **Timeline expectations:** Assumptions take 45-90 days. Your offer should reflect a realistic closing timeline.

A good assumption processor will help you structure this properly.

Step 5: Submit the Assumption Package

Once your offer is accepted, the real work starts. You'll need to submit an assumption package to the loan servicer. This includes:

1. Your completed loan application
2. Income verification (pay stubs, W-2s, tax returns)
3. Asset verification (bank statements)
4. Credit authorization
5. A copy of the purchase agreement

This is where working with an assumption processor makes a massive difference. Companies like UMe and Roam have built relationships with the servicers. They know the right contacts, the right forms, and how to keep things moving when the servicer adds friction.

And trust me, the servicers will add friction. They don't love processing assumptions because they'd rather keep collecting interest at the higher current rates. But the law says they have to allow it.

Step 6: Underwriting and Approval

The servicer reviews your package just like a regular mortgage application. They verify your income, pull your credit, and confirm you meet the VA loan requirements.

Timeline for this step: typically 30-60 days, depending on the servicer. Some are faster. Some drag their feet. Your assumption processor's job is to keep the pressure on.

During this period, you might need to provide additional documentation. Respond quickly. Every delay on your end extends the timeline.

Step 7: Closing

Once approved, you'll close just like a regular real estate transaction. Title transfers, you sign the assumption documents, and the loan is now in your name.

At closing, you'll pay:

• **The equity gap** (your cash to close)
• **Assumption fee** (VA loans typically $300-$500)
• **Assumption processor fee** (UMe charges 1% of purchase price)
• **Standard closing costs** (title insurance, recording fees, etc.)

No origination fees. No lender fees. No appraisal in many cases. It's significantly cheaper than getting a new loan.

Step 8: Move In and Start Saving

That's it. The loan is yours. The rate is yours. The payment is yours.

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

I've had clients close on assumptions and literally not believe their first mortgage statement. The payment is that much lower than what they were expecting.

Common Concerns

"Can the process fall apart?" Yes, it can. At any point before closing, the servicer could deny the assumption or the deal could fall through. It's a risk, but it's the same risk you take with any mortgage application.

"What if I'm not a veteran?" You can still assume. The seller's entitlement stays tied to the loan, which some sellers aren't comfortable with. But many are. It's a conversation worth having.

"What about the equity gap?" Second mortgages are available. SpringEQ, HELOCs, and other options can help you cover the gap with as little as 5% down.

The process isn't always smooth. But the savings make it worth pushing through.