Can You Take Over Someone Else's VA Loan? | The Borges Real Estate Team
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The Borges Team

Pasadena
(213) 262-5092

Can You Take Over Someone Else's VA Loan?

Yes, VA loans are assumable. A qualified buyer can take over the seller's existing VA loan - including their interest rate. This is especially valuable when the seller locked in a rate of 3-4% and current rates are 6-7%. Both veterans and non-veterans can assume a VA loan with lender approval.

Why VA Loan Assumptions Matter Right Now

Between 2020 and 2022, VA loan rates dropped as low as 2.25-3.5%. Many veterans locked in those rates. Now, with rates significantly higher, those loans are gold.

If you can assume a seller's 3% VA loan instead of getting a new 7% loan, your monthly payment drops dramatically.

Monthly Payment Comparison: $500,000 Loan
New Loan at 7% $3,327/month
Assumed Loan at 3% $2,108/month
Monthly Savings $1,219/month

That's $14,628 per year in savings - just from keeping the seller's rate.

Looking for assumable VA loans in Greater LA? I track listings with low-rate assumable mortgages.
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Who Can Assume a VA Loan?

Here's what surprises most people: you don't have to be a veteran to assume a VA loan.

Buyer Type Can Assume? Effect on Seller's Entitlement
Veteran (substitutes entitlement) Yes Seller's entitlement restored
Veteran (doesn't substitute) Yes Seller's entitlement stays tied up
Non-veteran Yes Seller's entitlement stays tied up

The key difference is what happens to the seller's VA entitlement. If you're a veteran and substitute your own entitlement, the seller gets theirs back immediately. Otherwise, their entitlement stays tied to that property until the loan is paid off.

For Sellers

If your entitlement stays tied up after a non-veteran assumes your loan, you may have limited VA borrowing power until that loan is paid off. This is why some sellers prefer veteran buyers who will substitute entitlement.

The VA Loan Assumption Process

Step 1: Find an Assumable Loan

Not every seller wants to let someone assume their loan - especially if their entitlement will be tied up. Look for motivated sellers or those who understand the value proposition for both parties.

Step 2: Qualify with the Lender

You'll need to apply with the current loan's servicer. They'll verify:

  • Credit score (typically 620+ minimum)
  • Income and employment
  • Debt-to-income ratio
  • Ability to cover the equity gap (see below)

Step 3: Cover the Equity Gap

This is where many assumptions fall apart. You're taking over the remaining loan balance - not the home's current value.

Example: Equity Gap
Home Value Today $700,000
Remaining Loan Balance $500,000
Equity Gap (Your Cash Needed) $200,000

You need $200,000 in cash (or a second loan) to cover the difference between what you're assuming and what the home is worth.

Step 4: Pay Assumption Fees

The VA charges a 0.5% funding fee on assumptions - much lower than the 2.15-3.3% on new VA loans. You'll also pay standard closing costs.

Step 5: Close and Take Over

Once approved, you take over the loan with its original terms - rate, remaining balance, and remaining term.

Pros and Cons of VA Loan Assumptions

Advantages

  • Lower interest rate - Keep the seller's rate, potentially saving hundreds monthly
  • Lower funding fee - 0.5% vs 2.15-3.3% on new loans
  • No appraisal required by VA - Though lenders may require one
  • Non-veterans can access VA loan benefits - Rare opportunity

Disadvantages

  • Large equity gap - You need cash for the difference
  • Longer timeline - 45-90 days vs 15-30 for standard purchases
  • Limited inventory - Not many sellers offer assumptions
  • Lender cooperation varies - Some servicers are slow or difficult
Pro Tip

Some buyers bridge the equity gap with a second mortgage or HELOC. This adds complexity but can make assumptions work when you don't have $150K+ in cash sitting around.

Timeline: How Long Does a VA Assumption Take?

Expect 45-90 days from application to close. Some servicers take even longer because assumptions aren't their priority - they don't generate the fees that new loans do.

Build extra time into your purchase contract and work with an agent who has experience negotiating assumption timelines with sellers.

Want to Find Assumable VA Loans?

I track low-rate assumable mortgages in Greater Los Angeles. Let's find you a deal.

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FAQ

Can you take over someone else's VA loan?
Yes. VA loans are assumable, meaning a qualified buyer can take over the seller's existing loan including the interest rate. Both veterans and non-veterans can assume VA loans with lender approval.
Do you have to be a veteran to assume a VA loan?
No. Non-veterans can assume VA loans. However, if a non-veteran assumes the loan, the original veteran's entitlement stays tied up until the loan is paid off.
What is the VA loan assumption fee?
The VA charges 0.5% of the loan balance as a funding fee for assumptions. On a $500,000 balance, that's $2,500 - much less than the 2.15-3.3% on new VA loans.
How long does a VA loan assumption take?
Typically 45-90 days. Some servicers take longer because assumptions don't generate as much revenue as new loans. Build extra time into your contract.
What happens to the seller's entitlement?
If a veteran buyer substitutes their own entitlement, the seller's is restored immediately. If a non-veteran assumes or the veteran doesn't substitute, the seller's entitlement stays tied up until payoff.
Can I assume a VA loan if I already have a mortgage?
Yes. The lender will evaluate your total debt-to-income ratio including both mortgages. You'll need to qualify based on all monthly obligations.
JB

Justin Borges

Realtor | Veterans United Partner | DRE# 01940318

Disclaimer: This article provides general information about VA loan assumptions and is not financial advice. Assumption availability, lender requirements, and timelines vary. Consult with a qualified lender and real estate professional for your specific situation. The Borges Real Estate Team is not a lender.