VA Assumable Loan as a Civilian

[Anonymous]

Any civilians in this forum ever assume a VA Loan? What was the process like for you and would you recommend it?

[Anonymous]

The veteran seller would be a fool to agree to it.

We are in the process of buying a home where we are assuming a VA loan (2.75%) but my spouse has VA eligibility, so the seller will not lose theirs.

There were three offers on the house:
Offer 1 was doing a conventional loan but offered less than asking

Offer 2 offered asking, but was a civilian wanting to assume their VA loan

Offer 3 (us) offered asking, wanted to assume their VA loan, but would use our own eligibility.
Obviously ours was the strongest offer.

Unless you are buying in a strong buyers market and the seller is desparate, I think you will have a difficult time getting the seller to agree to it.

[Anonymous]

Currently selling our VA assumable home and we would not be ok with a civilian assuming the loan. We'd lose a huge chunk of our VA benefit and not be able to get it back until the loan was completely paid off. That limits our buying power for our next home.

[Anonymous]

Anonymous wrote:The veteran seller would be a fool to agree to it.

We are in the process of buying a home where we are assuming a VA loan (2.75%) but my spouse has VA eligibility, so the seller will not lose theirs.

There were three offers on the house:
Offer 1 was doing a conventional loan but offered less than asking

Offer 2 offered asking, but was a civilian wanting to assume their VA loan

Offer 3 (us) offered asking, wanted to assume their VA loan, but would use our own eligibility.
Obviously ours was the strongest offer.

Unless you are buying in a strong buyers market and the seller is desparate, I think you will have a difficult time getting the seller to agree to it.

We both have VA eligibility. Only using mine on our current house, so I would have no issue having a civilian assume the loan. I think there are quite a few dual veteran households.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The veteran seller would be a fool to agree to it.

We are in the process of buying a home where we are assuming a VA loan (2.75%) but my spouse has VA eligibility, so the seller will not lose theirs.

There were three offers on the house:
Offer 1 was doing a conventional loan but offered less than asking

Offer 2 offered asking, but was a civilian wanting to assume their VA loan

Offer 3 (us) offered asking, wanted to assume their VA loan, but would use our own eligibility.
Obviously ours was the strongest offer.

Unless you are buying in a strong buyers market and the seller is desparate, I think you will have a difficult time getting the seller to agree to it.

We both have VA eligibility. Only using mine on our current house, so I would have no issue having a civilian assume the loan. I think there are quite a few dual veteran households.

I think there are more households where only one member is a veteran.

[Anonymous]

https://www.rand.org/pubs/infographics/IGA1363-5.html

According to this site, as of 2022, 2.7% of veteran households are two veterans married to each other.

[Anonymous]

I’m curious the circumstances leading you to ask this. It is a HUGE benefit to the buyer and a big negative to the seller (they lose their eligibility). You’d be lucky to be able to!

[Anonymous]

OP are you still here?
I'm just nosy and like the pp above me, am really curious what the situation is?
Do you already have an accepted offer on a house, using assuming their VA loan? Or were you just hoping to make such an offer?

[Anonymous]

Anonymous wrote:Any civilians in this forum ever assume a VA Loan? What was the process like for you and would you recommend it?

How is this possible when civilians aren’t eligible for VA loans? Can it be changed to an FHA loan?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Any civilians in this forum ever assume a VA Loan? What was the process like for you and would you recommend it?

How is this possible when civilians aren’t eligible for VA loans? Can it be changed to an FHA loan?

One needs eligibility for VA benefits to obtain a VA Home Loan. One does not need eligibility to assume an existing VA Home Loan. The key difference is the negative impact it has on the veteran who took out the loan originally.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Any civilians in this forum ever assume a VA Loan? What was the process like for you and would you recommend it?

How is this possible when civilians aren’t eligible for VA loans? Can it be changed to an FHA loan?

It can’t be changed. VA loans can be assumed by civilians but then the veterans loses their eligibility until it is paid off.
We offered a house with an assumable 2.75% loan last summer. We got an offer wanting to assume our loan for $100k under. It honestly only seemed to attract people looking for a real bargain where the rate could keep their mortgage payment low and it could stretch them further. We ended up not transferring it to anyone.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The veteran seller would be a fool to agree to it.

We are in the process of buying a home where we are assuming a VA loan (2.75%) but my spouse has VA eligibility, so the seller will not lose theirs.

There were three offers on the house:
Offer 1 was doing a conventional loan but offered less than asking

Offer 2 offered asking, but was a civilian wanting to assume their VA loan

Offer 3 (us) offered asking, wanted to assume their VA loan, but would use our own eligibility.
Obviously ours was the strongest offer.

Unless you are buying in a strong buyers market and the seller is desparate, I think you will have a difficult time getting the seller to agree to it.

We both have VA eligibility. Only using mine on our current house, so I would have no issue having a civilian assume the loan. I think there are quite a few dual veteran households.

PP you quoted here. I've been discussing this with my husband a lot so I'm responding again.

I still think it would be a bad idea for you to allow a random civilian to assume your VA loan. Sure, you'd still have your spouse's VA eligibility, but what if you get divorced? Or what if your spouse dies? Your eligibility could still be tied up for decades and you can no longer use your spouse's VA benefits.

I've also read that if the civilian defaults on the loan, it can negatively impact the veteran who originally held it.

I can really only think of a few situations where it would be a good idea for a veteran to allow a civilian to assume their loan:

1. If the civilian buyer is their own child. As parents, we make all kinds of huge sacrifices for our children, so I can understand that in some situations, this would be a sacrifice a parent would be willing to make.

2. If the seller was absolutely desperate and facing imminent foreclosure.

3. If the veteran home owner is dead. If they are dead, they won't be able to use their eligibility again anyway, so it would make sense that the veteran's heirs would be willing to allow a buyer to assume it (if it's allowed under VA rules? I don't even know that as a fact, but if it is allowed...)

[Anonymous]

I posted before we offered our home with an assumable loan. For the right price, we would have been fine parting with our VA eligibility (and TBH we aren’t using it right now - found a loan with as competitive of a rate as VA and didn’t need the low down payment anymore as we’re older). That price would have been a FULL offer or over. But don’t ask to assume our VA eligibility and offer $100k under…

[Anonymous]

Anonymous wrote:I posted before we offered our home with an assumable loan. For the right price, we would have been fine parting with our VA eligibility (and TBH we aren’t using it right now - found a loan with as competitive of a rate as VA and didn’t need the low down payment anymore as we’re older). That price would have been a FULL offer or over. But don’t ask to assume our VA eligibility and offer $100k under…

I'm a pp that posted we are currently under contract to assume someone's loan. We had a significant down payment a well (over 50%) but for us, the benefit of assuming this VA loan is the lower interest rate.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I posted before we offered our home with an assumable loan. For the right price, we would have been fine parting with our VA eligibility (and TBH we aren’t using it right now - found a loan with as competitive of a rate as VA and didn’t need the low down payment anymore as we’re older). That price would have been a FULL offer or over. But don’t ask to assume our VA eligibility and offer $100k under…

I'm a pp that posted we are currently under contract to assume someone's loan. We had a significant down payment a well (over 50%) but for us, the benefit of assuming this VA loan is the lower interest rate.

Yes, the rate is often a little bit lower. We were able to find the same rate through an agreement through my husbands employer and went with it because the paperwork was faster. Also some veterans with 100% disability get closing fees waived, I believe, so there are lots of reasons to keep your eligibility we just don’t happen to be using ours now.