As a retired Coast Guard Chief Petty Officer turned Realtor®, I’ve had the opportunity to guide clients through all kinds of transactions. One of the most unique (and often misunderstood) is the VA loan assumption. While many agents may never touch one, I’ve successfully closed four — two representing sellers and two representing buyers. And let me tell you, they are not as simple as they sound.
My Experience with VA Loan Assumptions
- On the seller side: Both assumptions were with Freedom Mortgage.
- On the buyer side: Both were with M&T Bank.
In every single case, we faced a lengthy approval process. My clients were even told outright that because lenders don’t make money on assumptions, these files often get “pushed to the back of the line.” That means weeks (sometimes months) of waiting, constant follow-ups, and a lot of patience.
The Reality for Sellers
For sellers, a VA assumption can sound appealing: your buyer takes over your existing loan, potentially making your home more marketable in a high-interest-rate environment. But here’s the catch — the process can drag on, and your timeline isn’t always in your control.
Another important factor: your VA entitlement.
- If your buyer has their full VA entitlement, they can substitute it for yours. That means your entitlement is restored once the assumption is complete.
- If your buyer does not have entitlement (or only partial entitlement), your VA entitlement stays tied up in that mortgage until it’s paid off. That could limit your ability to use your VA benefit on your next purchase.
There’s also a potential pricing advantage for sellers. Since you’re offering a buyer the opportunity to assume your great low interest rate, that perk carries real financial value. For example, a buyer assuming a 2.75% loan today could save hundreds per month compared to getting a new loan at 6–7%. That kind of monthly savings can make it reasonable for a seller to stick closer to their list price, even if it’s a little higher than comparable sales in the area.
👉 Bottom line: If you’re selling with a VA loan, it’s often in your best interest to accept an offer from a buyer who has their full VA entitlement—and remember, your low rate can help justify your asking price.
The Win for Buyers
The real win in an assumption is on the buyer side. If you can qualify and secure a VA loan assumption, you step into the seller’s existing rate and terms. In today’s market, that could mean inheriting a 2.5% or 3% interest rate when new loans are in the 6–7% range. That difference can translate to hundreds (or even thousands) in monthly savings.
The Buyer’s Biggest Challenge: Covering the Gap
While assuming a VA loan can be a huge financial win, buyers need to understand one big challenge: the gap between the loan balance and the seller’s list price.
For example, if a seller has a $400,000 loan balance but is listing their home at $600,000, the buyer needs to come up with the $200,000 difference. Some buyers think they can simply get a second loan, like a HELOC or second mortgage, to cover the gap. But that’s not always the case.
- Not every lender is willing to finance a second loan on an assumption.
- When they are, the amount they’ll lend depends heavily on the loan-to-value ratio. That means the numbers have to work for the lender, not just the buyer.
- In many cases, the buyer needs to bring a significant amount of cash to make the assumption work.
This is why it’s so important for buyers to sit down with a knowledgeable loan officer before making an offer on an assumable VA loan.
Concierge Services: Help or Headache?
In two of my four VA assumption transactions, my clients worked with concierge services that act as a middleman between the lender and the buyer or seller. These companies advertise themselves as a way to make the process simple, straightforward, and fast.
My Experience
- The not-so-good: One servicer didn’t provide much help. They had my clients fill out outdated forms, only for the lender to reject them and require new forms. That meant twice the work with no real value added.
- The good: Another service was much more effective. They completed the paperwork on behalf of my clients and, more importantly, held the lender accountable by pointing out where the lender wasn’t adhering to VA guidelines. That kind of advocacy can save time and stress.
Should You Use a Concierge Service?
These services can be helpful, but results vary. The right concierge can reduce headaches by handling forms correctly and pushing back when lenders drag their feet. But the wrong one can add unnecessary steps and frustration. If you’re considering using one, ask questions up front about how they interact with the lender and how they keep the process on track.
What I’ve Learned
- Expect Delays – Assumptions take longer. Period. Build that into your expectations and timelines.
- Stay on Top of the Lender – Escrow officers and agents need to stay proactive because assumptions aren’t a priority for most lenders.
- Educate Your Clients Early – Many buyers and sellers don’t realize how different this process is from a traditional loan. Setting expectations up front is key.
- The Buyer Benefits Most – If you’re on the buy side and can assume a low-rate loan, it can be one of the smartest moves in real estate today.
- Concierge Services Are Mixed – The right one can be a lifesaver, the wrong one can waste your time. Choose wisely.
- Cash Matters – Buyers need to plan ahead for the gap between loan balance and purchase price.
Final Thoughts
VA loan assumptions are not for the faint of heart — but they can be incredibly rewarding, especially for buyers. With experience on both sides of these transactions, I’ve seen the frustrations, the delays, and the wins firsthand.
If you’re considering a VA assumption, whether buying or selling, work with someone who’s been through it before. I’d be happy to share my experience and guide you through the process.