loanDepot Assumable Mortgage Guide: FHA and VA Loan Assumptions
loanDepot is one of the largest non-bank mortgage lenders in the United States, and every FHA and VA loan they service is legally assumable. If a seller's mortgage is serviced by loanDepot and the underlying loan is FHA or VA, a buyer can take over that loan at the seller's original interest rate. On a $500,000 loan at 3.25%, that means a payment of $2,176 per month instead of $3,260 at today's rates: $1,084 per month in savings, or $13,008 per year.
Here's what you need to know:
Which loanDepot Loans Are Assumable?
FHA loans and VA loans are assumable. Conventional loans are not. loanDepot originates all three types, so the loan type on a specific property determines whether assumption is an option.
Every FHA and VA loan has the right of assumption written into the original loan documents. This is not a lender policy decision: it is federal law. loanDepot cannot decline an assumption request on an FHA or VA loan on the grounds that they prefer refinances or new originations.
The key is confirming the loan type before you make an offer. Check the MLS remarks, ask the listing agent, or pull county records. A property listed with loanDepot as servicer and an FHA or VA loan is an assumption opportunity. An assumable mortgage specialist in Colorado can run this check across dozens of listings at once.
One important nuance with loanDepot: like many large originators, they sell mortgage servicing rights periodically. If a loan originated with loanDepot has been transferred to a subservicer, you will deal with that subservicer, not loanDepot, for the assumption. Always verify the current servicer by checking the borrower's most recent mortgage statement before beginning the process.
FHA Loan Assumptions at loanDepot
When you assume an FHA loan serviced by loanDepot, you take over the remaining principal balance, the original interest rate, and all original loan terms. The lender fully underwrites the buyer from scratch, the same way they would for a new purchase.
FHA assumption requirements through loanDepot:
- Minimum credit score meeting FHA guidelines (580 or higher for standard approval; 500-579 with larger down payment toward equity gap)
- Documented stable income: W-2s, two years of tax returns, or 1099 documentation for self-employed buyers
- Debt-to-income ratio within FHA limits (typically 43% or lower, with exceptions)
- Funds to cover the equity gap: the difference between the remaining loan balance and the appraised value, paid via cash, gift funds, or a gap loan from a secondary lender
- FHA assumption fee (typically $500 or less, per HUD guidelines)
The FHA Mortgage Insurance Premium (MIP) transfers with the loan. The buyer continues paying MIP at the original rate and terms. If the original loan was originated before June 2013, the MIP may drop off after 11 years, which is a meaningful benefit the buyer inherits.
For a full walkthrough of the FHA assumption process, see the FHA loan assumption guide for Colorado.
VA Loan Assumptions at loanDepot
VA loans serviced by loanDepot are assumable by any creditworthy buyer, veteran or not. The VA writes this right into every VA loan at origination, without exception. loanDepot does not have the authority to restrict assumption eligibility based on the buyer's military status.
What loanDepot does control is the credit and income review of the assuming buyer. Expect the same documentation required for a new mortgage: pay stubs, W-2s, bank statements, and enough assets to cover the equity gap.
VA assumption qualification checklist:
- Full credit review (no minimum set by VA, but lenders typically require 580-620 minimum)
- Stable employment and income documentation
- Sufficient assets for the equity gap
- Signed VA assumption application package
- VA Funding Fee: non-veterans pay 0.5% of the loan balance; veterans may be exempt depending on disability rating
For a $500,000 VA loan originated at 3.00% in 2021, the remaining balance is approximately $455,000 today. If the home is worth $540,000, the equity gap is $85,000. That is the buyer's responsibility to cover, whether through cash, a secondary loan, or a combination. Run your specific numbers at the assumable mortgage calculator.
VA Entitlement and the Seller
When a non-veteran assumes a VA loan, the original seller's VA entitlement stays tied to the property until the assumed loan is paid off. The seller cannot use their full VA entitlement on a future home purchase until the liability clears.
When a veteran assumes the loan and substitutes their own entitlement, the seller's entitlement is restored immediately. Sellers who plan to buy again with VA financing should know this distinction before accepting an offer.
This is a VA program rule, not a loanDepot policy. Full details: VA loan assumptions explained.
How the loanDepot Assumption Process Works
The assumption process at loanDepot follows the standard framework required for all FHA and VA servicers. There is no shortcut to closing faster than the required underwriting, but being organized upfront saves weeks.
Step 1: Verify the loan type and servicer. Before making an offer, confirm the loan is FHA or VA and that loanDepot is the current servicer. If the servicing has been sold, you will start this process with the current servicer instead.
Step 2: Contact loanDepot's loan servicing department. Call the servicing line and request to speak with someone in the assumption or loan transfer department. Provide the property address and the seller's loan information. Do not start this process through the originations department: they handle new loans, not assumptions.
Step 3: Request the assumption application package. loanDepot will provide an assumption request form, a list of required documents, and the current outstanding balance. This package governs the entire process.
Step 4: Submit a complete application. Partial applications create delays. Submit all required documents at once: government-issued ID, income documentation, credit authorization, employment verification, bank statements, and the executed purchase agreement between buyer and seller.
Step 5: Underwriting review. loanDepot underwrites the buyer's credit and income the same as a new purchase. This is where most assumption delays occur. The FHA and VA both allow up to 45 days for servicers to process assumption applications, but the realistic range across the industry is 45 to 90 days from complete application submission.
Step 6: Approval and closing coordination. Once approved, loanDepot issues the assumption agreement. The closing agent, buyer, and seller execute the transfer documents. The seller receives a release of liability, the buyer becomes the borrower of record, and the original rate and terms continue unchanged.
Release of Liability for Sellers
Sellers should confirm their assumption agreement includes a formal release of liability. This document removes the seller from financial responsibility for the loan. Without a release of liability, the seller remains legally on the hook if the assuming buyer defaults, even though they no longer own the property.
On FHA loans, HUD requires that the servicer evaluate the buyer and issue a release of liability when the buyer qualifies. On VA loans, the VA has its own release of liability process for veterans who want to restore their entitlement.
If you are selling a property with a loanDepot FHA or VA loan, get the release of liability confirmed in writing before closing. Your listing agent and title company should verify this step explicitly.
Costs and Fees for loanDepot Assumptions
| Cost Item | Estimated Amount |
|---|---|
| FHA Assumption Fee | $500 (HUD cap) |
| VA Funding Fee (non-veteran) | 0.5% of loan balance |
| VA Funding Fee (veteran, no exemption) | 0.5% of loan balance |
| Title/Settlement Fees | $800 to $1,500 (varies by state) |
| Recording Fees | $50 to $200 |
These are closing costs on top of the equity gap. Compared to a new purchase mortgage (typically 2-5% of the loan amount in closing costs), the total out-of-pocket on an assumption is significantly lower. The main cost is the equity gap itself.
loanDepot vs. Other Servicers
Every FHA and VA servicer follows the same federal rules on assumptions. What varies between servicers is processing speed, communication quality, and whether they assign a dedicated assumption coordinator to each transaction.
loanDepot is a large, well-resourced servicer with established processes. They are not known for being particularly fast or slow on assumptions compared to the industry average. The biggest variable in timeline is the completeness of the buyer's application package, not the servicer.
If the servicing has been transferred off of loanDepot (check the seller's most recent statement), the new servicer's assumption team handles the process entirely. Do not contact loanDepot if they no longer service the loan.
Frequently Asked Questions
Can I assume a loanDepot mortgage if I'm not a veteran?
Yes. Non-veterans can assume any VA loan, including ones serviced by loanDepot. The VA writes the right of assumption into every VA mortgage at origination, and that right transfers to any creditworthy buyer regardless of military status. The catch: when a non-veteran assumes the loan, the original seller's VA entitlement stays tied to the property until the assumed loan is fully paid off. The seller cannot use their VA benefit on another purchase in the meantime.
How long does a loanDepot mortgage assumption take?
Plan for 45 to 90 days from complete application submission to closing. This timeline is typical across all FHA and VA servicers, including loanDepot. The most common cause of delays is an incomplete application package. Submit all required documents at once and follow up weekly with loanDepot's servicing team.
What credit score do I need to assume a loanDepot FHA or VA loan?
FHA assumptions require a minimum 580 credit score for standard approval. Scores between 500 and 579 may qualify with additional conditions. VA assumptions do not have a VA-set minimum, but loanDepot's underwriting typically requires 580 to 620. A higher score does not increase the interest rate you assume: you lock in the seller's original rate regardless of your credit score, as long as you qualify.
What happens to the seller after a loanDepot mortgage assumption?
Once a loanDepot assumption closes with a release of liability, the seller is removed from the loan. They are no longer responsible for payments, and the assumed loan does not appear on their credit report going forward. If no release of liability is issued, the seller remains liable if the buyer defaults. Sellers should confirm the release of liability is included in their assumption agreement before signing.
Can loanDepot deny an assumable mortgage request?
loanDepot can deny an assumption if the buyer does not qualify financially. They cannot deny the right to assume the loan itself on an FHA or VA mortgage: federal law requires them to allow it. If loanDepot denies the application, it is because the buyer did not meet credit, income, or DTI requirements, not because loanDepot objects to the transaction type. A denial does not mean assumptions are off the table; it means that specific buyer did not qualify under loanDepot's underwriting standards.