VA Loan Assumption Calculator & Checklist
A VA loan assumption lets a qualified buyer take over a seller’s existing VA mortgage—keeping the interest rate, remaining balance, and repayment schedule. When market rates are higher, an assumption can lower the buyer’s payment, but the current loan servicer must approve the transfer and the buyer usually must fund the equity gap at closing.
Quick Answers
Core Eligibility
- The existing mortgage must be VA‑backed and eligible for assumption.
- The buyer typically must intend to occupy as a primary residence.
- The current servicer approves the buyer and may underwrite income, credit, and debts (standards vary by company).
Critical Financial Considerations
- The equity gap is usually purchase price minus remaining balance and is commonly paid to the seller at closing.
- Assumptions can involve a VA funding fee (often 0.5% of the outstanding balance unless exempt); confirm exemption status early.
- Closing costs still apply (servicer processing, title/recording, escrow funding); request a written fee worksheet early.
How Assumptions Affect Veteran Sellers
- If a non‑Veteran assumes, the seller’s VA entitlement can remain tied to the loan until payoff or refinance.
- A VA‑eligible buyer may be able to substitute entitlement (subject to approval), helping the seller restore VA buying power sooner.
- Sellers should secure a written release of liability to reduce exposure if the new borrower defaults later.
Process and Timelines
- Best first step: request the servicer’s assumption package and submission checklist early.
- Timelines vary; many closings run 45–90+ days depending on workload and file completeness.
- Keep backup financing in case the assumption stalls or the equity gap becomes unworkable.
VA Assumption Savings Calculator
This tool compares two paths for a buyer: assume an existing VA loan or get a new VA mortgage at today’s rate. It estimates principal-and-interest payments and how long it may take to recoup extra cash needed for an assumption. It does not include taxes, homeowners insurance, escrow changes, discount points, or the VA funding fee.
Results
Planning only — final approval, fees, and documentation requirements come from the current servicer.
Enter details on the left to estimate the equity gap and cash required.
Enter details on the left to estimate assumption savings and breakeven.
Cash to close snapshot
The equity gap is commonly paid to the seller at closing (cash, gifts, or approved secondary financing).
Breakeven on extra cash
If your expected hold period is shorter than breakeven, a new loan may be cleaner even if the assumed rate is lower.
Interest over your hold period
Interest-only estimate. Principal paydown and tax/insurance are not included.
What this calculator includes and excludes
- Included: Principal-and-interest payment estimates and rough interest totals over your stated hold period.
- Excluded: Property taxes, homeowners insurance, HOA dues, escrow changes, discount points, and the VA funding fee.
- Reality check: Servicers can require specific documentation, condition timelines, and fee schedules. Use these results to ask better questions, not as final numbers.
VA Assumption Eligibility & Entitlement Checklist
This checklist is a fast way to identify the high-level items that often decide whether an assumption is worth pursuing with the servicer. It does not approve or deny anyone — it highlights the most common green flags and red flags so you can avoid informal assumption mistakes.
Read your readiness result
Run the checklist to generate a readiness result.
Answer the questions on the left and select “Run checklist” to see a quick assessment. This does not approve or deny anyone; it highlights common green flags and red flags you should discuss with the loan servicer.
Key items to confirm with the servicer
- Whether the assumption includes a written release of liability for the seller.
- What income/credit/debt standards (and documentation) the buyer must meet for approval.
- How entitlement will be handled if the buyer is VA‑eligible or not.
- Exact assumption fees, who can pay them, and closing/recording requirements.
Official references: VA Lenders Handbook (VA Pamphlet 26‑7) and VA Home Loans.
How VA Loan Assumptions Work (Process, Equity Gap, Entitlement, Costs)
A VA assumption is a formal transfer of an existing mortgage obligation. The current servicer controls approval, underwriting, and closing mechanics. The two biggest execution risks are funding the equity gap and protecting the seller’s entitlement and liability.
Key Requirements to Clear
- Loan standing: the loan is typically current (or brought current) before closing.
- Buyer qualification: the servicer typically underwrites income, debt, credit, and assets.
- Occupancy: the buyer generally intends to occupy as a primary residence unless an exception is confirmed in writing.
- Paperwork: expect a servicer checklist, disclosures, and entitlement acknowledgements.
Common Dealbreakers
- Unfundable equity gap: the buyer can’t cover the price-to-balance gap cleanly, or secondary financing isn’t allowed/structured correctly.
- Timeline failure: closing slips beyond contract deadlines and forces renegotiation.
- Seller protection skipped: no written release of liability (and no entitlement plan).
Step-by-Step Process (Servicer-Controlled)
- Confirm it’s VA‑backed and request the servicer’s assumption package and fee schedule.
- Plan the equity gap funding path (cash, gifts, approved junior lien, or price renegotiation).
- Submit a complete buyer qualification file (income, assets, debts, occupancy intent).
- Clear underwriting conditions quickly to avoid re-review delays.
- Close and record correctly with the title/closing agent.
- Confirm release of liability and entitlement handling in writing.
Timeline expectations
- Many assumptions take 45–90+ days depending on servicer workload and file completeness.
- If deadlines matter, build buffer time into the contract and keep a backup financing plan.
When an Assumption Makes Sense vs a New Loan
Assumptions are most valuable when the assumed rate is meaningfully below market and the buyer can cover the equity gap without draining reserves. If the gap is too large or the timeline is tight, a new loan can be more predictable.
| Option | What you keep or create | Main constraint | Best use case |
|---|---|---|---|
| VA loan assumption | Keep the existing VA mortgage terms (rate, remaining balance, amortization). | Servicer controls approval and the buyer must fund the equity gap. | Rate advantage is large and you plan to hold long enough to benefit. |
| New VA purchase loan | New loan sized to purchase (minus any down payment) with current market terms. | Rate resets to today’s market; standard origination workflow applies. | Assumed rate isn’t compelling or the equity gap is too large to bridge safely. |
| Conventional / other financing | New loan structure that may differ on down payment and program rules. | May require down payment and/or PMI; underwriting varies by program. | The buyer isn’t VA‑eligible or the deal can’t support an assumption timeline. |
Equity Gap: How Buyers Actually Close Assumption Loans
The equity gap is the difference between the purchase price and the remaining loan balance being assumed. Buyers typically pay that gap to the seller at closing. Choose a single gap strategy early and document it end-to-end so underwriting doesn’t reset late.
| Equity gap strategy | How it works | Main risk to control |
|---|---|---|
| Cash at closing | Buyer pays the seller’s equity directly at closing and assumes the remaining first mortgage balance. | Low reserves can weaken underwriting and leave the buyer exposed to escrow shocks. |
| Junior lien (second mortgage) | Buyer borrows the equity gap through a subordinate lien while the VA loan remains the first lien. | Must remain subordinate; payment counts in underwriting; structure must follow servicer rules. |
| Price renegotiation | Buyer and seller reduce price to shrink the equity gap (sometimes paired with repairs/credits). | Late renegotiations compress timelines and can trigger re-review. |
Gap discipline checklist
- Calculate precisely: use the signed purchase price and a servicer-confirmed balance/payoff figure.
- Pick one strategy: mixing partial cash, partial junior financing, and late renegotiations often causes re-review delays.
- Stress-test affordability: include any junior lien payment so the budget survives escrow changes after move-in.
Entitlement and Seller Liability
For sellers, assumptions have two deliverables: entitlement handling and release of liability. Don’t treat either as automatic. Confirm both in writing and keep the documents for future VA use.
Entitlement
- Entitlement restoration is typically easiest when the buyer is VA‑eligible and substitutes entitlement (subject to approval).
- If a non‑Veteran assumes, entitlement may remain tied to the loan until it’s paid off or refinanced.
- If future VA use matters, check the seller’s COE status after closing once records update.
Release of Liability
- A release of liability is written confirmation the seller is no longer personally responsible after closing.
- Without it, the seller can remain exposed if the buyer defaults later — even though the home was sold.
- Treat the release as a required closing deliverable and retain it permanently.
Fees and Costs to Budget
Assumptions can include servicer processing charges, title/recording, escrow setup, and (in many cases) a VA funding fee unless exempt. Request a written fee worksheet early so cash requirements don’t appear after underwriting is complete.
What to budget for
- Servicer assumption fees: processing and documentation charges vary by servicer.
- Title and recording: assumptions still require clean closing mechanics and recorded transfers.
- Escrow funding: prepaid taxes/insurance can be meaningful even if the assumed rate is low.
- Funding fee: confirm whether a funding fee applies and whether exemptions exist.
VA Loan Assumption FAQs
These FAQs focus on the questions that typically decide whether a VA assumption is a smart move — especially equity gap execution, entitlement outcomes, and seller liability protection.
Are VA loans assumable, and who approves the assumption?
Many VA-backed mortgages can be assumed, but the transfer must be approved by the current loan servicer (and sometimes VA). A private agreement where a buyer “takes over payments” without servicer approval is not a proper assumption.
Who can assume a VA loan—including non‑Veterans?
In many cases, any qualified purchaser—including a non‑Veteran—can assume if they meet the servicer’s income, credit, and occupancy requirements and the loan is in acceptable standing. When a non‑Veteran assumes, the seller’s entitlement commonly remains tied to the loan until it’s paid off or refinanced.
What does the servicer underwrite for an assumption?
Expect underwriting of income stability, monthly debts, credit history, assets needed to close, and primary-residence intent. The servicer’s checklist and standards can vary, so getting the assumption packet early is one of the highest-leverage steps you can take.
How long does a VA loan assumption take?
Many assumptions land in the 30–90 day range depending on servicer workload and how complete the submission is. Submitting a complete package once and clearing conditions quickly is the best way to reduce delays.
What is the equity gap in a VA assumption?
The equity gap is typically purchase price minus the remaining loan balance being assumed. Buyers usually pay that gap to the seller at closing.
Can I use a second mortgage to cover the equity gap?
Sometimes. Junior-lien financing may be allowed if it stays subordinate to the VA loan’s first-lien position and is included in underwriting. Confirm structure requirements with the servicer early.
What happens to the seller’s VA entitlement after an assumption?
Entitlement often remains tied to the assumed loan unless a VA‑eligible buyer substitutes entitlement and the servicer/VA approve it. If entitlement stays encumbered, the seller may have reduced VA buying power until the loan is paid off or refinanced.
What is a Release of Liability?
A release of liability is written confirmation that the seller is no longer personally responsible for repayment after the assumption closes. Without it, the seller can remain exposed if the buyer defaults later.
What fees and closing costs should you budget for?
Costs can include servicer processing fees, title/recording, escrow setup, and (in many cases) a VA funding fee unless exempt. Request a written fee worksheet early so cash requirements don’t appear after underwriting.
Can a VA loan be assumed for a rental or second home?
Usually, the buyer must intend to occupy the home as a primary residence. If you’re planning a second home or investment use, confirm in writing before relying on an assumption.
Next steps
- Run the savings calculator with your real purchase price, servicer-confirmed balance, and a realistic equity-gap plan.
- Run the checklist and write down the servicer questions it flags (release of liability, entitlement handling, fees, and timeline).
- If you need a backup plan, compare VA loan offers so you’re not stuck if the assumption stalls.
