How to Assume a VA Mortgage

By Terry Smith

Among the many benefits Veterans Affairs (VA) offers to veterans is guaranteed home loans. As of 2010, the VA will guarantee mortgages up to $417,000, which means that veterans using this benefit won't have to make a down payment to secure any home loan for less than that amount. When a veteran sells a house bought with a VA loan, under most circumstances the buyer can assume the guaranteed loan, even if the buyer isn't a veteran, and the VA assumption frequently makes the home a much more attractive buy.

Find an assumable VA loan. Check local multi listing systems (MLS), where local real estate agents list their properties. If a house is being sold with an assumable VA mortgage, the listing will specify that fact. You can also check va.equator.com/index.cfm, which lists homes with VA-guaranteed mortgages that have been foreclosed. Some of those loans may also be assumable.

Find a lender who will lend you the money required to buy the home. If the mortgage was finalized after March 1, 1988, the assumer must be approved to assume the loan by the original lender or VA.

File a VA form 26-6381 (Release of VA Loan Liability) to release the seller from liability from default on the loan with the VA.

Finalize the sale through the real estate agency and the mortgage banker.

Most mortgage brokers and many real estate agents are familiar with executing VA assumptions, and they should be able to assist you in assuming a VA home loan from a willing seller.

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