What is an assumable VA loan?
An assumable VA loan is a home loan backed by VA that another buyer can take over. You do not have to be a veteran. You must qualify, and the loan company must approve you. Unless a veteran buyer swaps in their own benefit, the seller's VA home loan benefit, called entitlement, stays tied to the loan.
Can a non-veteran assume a VA loan?
Yes. Any buyer who qualifies can assume a VA loan. Federal law says you must qualify for credit the same way a veteran would.
The servicer is the company that collects the monthly payments and manages the loan. In a VA loan assumption, the seller's servicer reviews you. VA's rules say it must approve the assumption when three things are true:
- The loan is current, meaning no payments are behind.
- You are under contract to buy the home and to take on the full loan.
- You meet VA's credit and income rules.
New to the topic? Read our guide to how an assumable mortgage works in Arizona.
What happens to the seller's entitlement?
It stays tied to the loan until the loan is paid off, unless a veteran buyer swaps in their own entitlement. Entitlement is the amount VA promises to back on a veteran's home loan.
Why does this matter to the seller? A veteran whose entitlement is still tied up may need a down payment on their next VA loan. That is why some veteran sellers prefer a veteran buyer.
Substitution of entitlement
A veteran buyer can swap in their own entitlement. VA calls this a substitution of entitlement. The veteran buyer must have enough entitlement and must plan to live in the home. Then the seller gets their entitlement back.
Example: A veteran sells a home and a non-veteran takes over the VA loan. The seller's entitlement stays tied to that loan. If a veteran buyer with enough entitlement takes over instead and swaps theirs in, the seller gets their entitlement back.
The servicer should give the selling veteran VA's Assumption Entitlement Acknowledgement form right after an application comes in. It explains what happens to their entitlement.
Is the seller released from the VA loan?
Yes, when the servicer approves the assumption. A release of liability is a paper that says the seller no longer owes the loan. Federal law says that once the assumption is approved, the seller no longer owes VA anything on the loan.
But a release is not the same as getting entitlement back. Without a swap, the seller no longer owes the debt, but their entitlement stays tied to the loan.
Is there a funding fee on a VA loan assumption?
Yes. The VA funding fee on an assumption is 0.5% of the loan balance. A funding fee is a one-time fee paid to VA.
- It is paid in cash at closing. It can't be added to the loan.
- You don't pay it if you are a veteran who gets VA disability pay, the surviving spouse of a veteran who died from a disability caused by military service, or an active-duty service member who has received the Purple Heart. Other buyers pay it, including buyers who aren't veterans.
Example: You take over a VA loan with a $300,000 balance. The funding fee is 0.5% of $300,000, which is $1,500. You pay that $1,500 in cash at closing.
What other fees come with a VA loan assumption?
The servicer can charge a processing fee of up to $300, plus the cost of your credit report. That is in addition to the 0.5% funding fee.
- Processing fee: up to $300.
- Credit report: the cost of pulling your credit.
- Arizona fee: the servicer may add up to $463 when the assumption closes.
- Funding fee: 0.5% of the loan balance, paid in cash at closing, unless you are exempt.
VA also says the seller may pay the real estate commission.
Do I have to qualify to assume a VA loan?
Yes. The servicer looks at the same papers it would for a new VA purchase loan. That includes your credit, income, debts and savings.
- An underwriter reviews you. An underwriter is the person who decides if you can afford the loan. VA says to use its normal credit rules.
- The loan must be current. Missed payments can be paid with cash at closing. In most cases, they can't be fixed by changing the loan terms at the time of the assumption.
- No extra servicer rules. VA says a servicer can't deny you because of its own extra rules.
Check your numbers first with our debt-to-income ratio calculator.
How long does a VA loan assumption take?
Assumptions often take 4 to 16 weeks. VA also sets deadlines. Once the servicer has your complete file, it has up to 45 days to decide. If the servicer can't approve assumptions on its own, it has 35 days to send your file to VA, and then VA decides.
These deadlines start when the servicer has every paper it needs. So send in what it asks for right away.
How do I cover the equity gap on a VA loan assumption?
You can pay it in cash or with a second loan that follows VA's rules. The equity gap is the difference between the price and the loan balance you take over.
Example: Say the price is $400,000 and the seller owes $300,000. You take over the $300,000 VA loan. That leaves a $100,000 equity gap that you owe the seller at closing.
A second loan is a separate loan that sits behind the VA loan. VA's August 2024 rules let you use one to pay closing costs or the money owed to the seller. The second loan must follow these rules:
- It must be in second place behind the VA loan.
- The servicer must write down the second lender's name, the loan amount and how it will be paid back.
- You get no cash back from it.
- Its monthly payment counts as a debt when the servicer checks if you qualify.
- It must give you a reasonable grace period before late fees or foreclosure. A grace period is extra time to pay after a due date. Foreclosure is when the lender takes the home after missed payments.
- The servicer must check that the second loan meets these rules.
- If the second loan can't be taken over later, it may be harder to sell the home by assumption in the future.
A seller carry-back, where the seller lends you part of the gap, follows these same rules. Read our seller carry-back guide. Check how much cash you have on our down payment calculator.
Can you get help with a second loan for the gap?
Yes. We can help you look at a second loan to cover the gap. We will also compare it with a new loan, so you can see which one fits you better.
How is a VA loan assumption different from an FHA assumption?
The biggest differences are entitlement and fees. Only VA loans can tie up the seller's entitlement, and only VA charges a funding fee, while a Federal Housing Administration (FHA) loan has a higher processing fee cap and its own living-in-the-home rule.
| Question | VA loan | FHA loan |
|---|---|---|
| Who can assume? | Any buyer who qualifies, veteran or not | Any buyer who qualifies. For loans made on or after December 15, 1989, the buyer must also live in the home. |
| What happens to the seller's VA entitlement? | It stays tied to the loan unless a veteran buyer swaps in their own | Does not apply |
| One-time government fee | 0.5% funding fee on the loan balance, paid in cash at closing. Some buyers don't pay it. | None |
| Processing fee limit | Up to $300, plus the credit report, plus up to $463 in Arizona | Up to $1,800, plus credit report and job-check costs |
| Must the buyer live in the home? | A veteran buyer who swaps in their entitlement must plan to live there. The servicer reviews every file. | Yes, for loans made on or after December 15, 1989 |
VA and FHA loan assumptions side by side (from VA and HUD rules as of October 2026).
See our guide to the assumable FHA loan in Arizona.
What should Arizona buyers know about VA loan assumptions?
VA's main rules are the same in Arizona as in other states. In Arizona, VA lets the servicer add up to $463 when an assumption closes, on top of the processing fee and credit report.
- If you are a veteran, ask us whether swapping in your entitlement makes sense for you.
- Mortgage Brothers is licensed in Arizona only. Learn more about our VA loans in Arizona, or start with our Arizona first-time home buyer guide.
Which guides and calculators can help next?
What else do buyers ask about VA loan assumptions?
Can I appeal if the servicer turns down my VA loan assumption?
What form starts a VA loan assumption?
How do I know a VA loan can be assumed?
Are older VA loans different?
What if the seller has a VA partial claim?
Is a release of liability the same as restoring entitlement?
Where do these facts come from?
- 38 U.S.C. 3714, Assumptions; release from liability
- 38 U.S.C. 3702, Basic entitlement (restoring entitlement)
- 38 U.S.C. 3729, Loan fee (funding fee table and waivers)
- 38 CFR Part 36, Subpart B: 36.4303(l) processing deadlines, 36.4309(c) assumption notice, 36.4313 fees (eCFR)
- VA Circular 26-23-10, VA Assumption Updates
- VA Circular 26-23-10 Change 1, assumption fees
- VA Circular 26-23-27, Noncompliance in Processing Assumptions
- VA Circular 26-24-9, Assumption Entitlement Acknowledgement (VA Form 26-10291)
- VA Circular 26-24-17, Secondary Borrowing Requirements on Assumption Transactions (August 2024)
- VA Circular 26-24-5, Assumption Locality Variance (section 3)
- VA Circular 26-24-5, Exhibit A: Assumption Locality Variance amounts (West, including Arizona: $463)
- VA Circular 26-25-9, partial claim repayment
- VA Form 26-6381, Application for Assumption Approval and/or Release from Personal Liability
- VA.gov, VA home loan entitlement and limits
Agency rules change from time to time. This page reflects the sources above as of October 2026.