Somebody in your neighborhood is paying 2.75 percent on their mortgage. You're being quoted close to 7. If their loan is a VA loan, you might be able to take it over, rate and all.

That's a VA loan assumption. It's real, it's written into federal law, and a lot of buyers never think to ask about it. I'm Kimo Quance, a Coast Guard veteran and Realtor with eXp Realty, and I look for assumable loans every week in Middle Tennessee. Here's how it works from the buyer's side of the table, including the parts that cost money. If you're a veteran using your own benefit to buy, my guide to buying a home in Franklin with a VA loan covers the rest. Or call or text me at 615-392-1186 and I'll tell you whether a specific house has an assumable loan on it.

Can a Non-Veteran Assume a VA Loan?

Yes, and it surprises a lot of people.

The VA's rules say an assumption has to be approved when three things are true. The loan is current. You're under contract to buy the home and agree to take on full liability for the loan. And you're creditworthy under the VA's underwriting standards. That's the list. Military service isn't on it.

And the servicer has to use the VA's standards, not its own. In December 2023 the VA warned servicers that denying an assumption over their own extra requirements, which the industry calls overlays, is noncompliance, and it can cost them the VA's guaranty on the loan.

The VA's own fee guidance says the assumption charges apply to the buyer "irrespective of the assumer's Veteran status." So a civilian can assume a VA loan, and so can a veteran.

What changes when the buyer is a veteran is the seller's side of the deal, which I'll get to in a minute.

What Does It Cost to Assume a VA Loan?

Usually less than a new loan, because the VA spells out exactly what can be charged. Here's the whole list the VA allows the buyer to pay on an assumption:

• An assumption processing fee of no more than $300, which is meant to cover underwriting, processing and closing. Where state law sets a lower maximum, the lower number applies.
• A VA funding fee of 0.5 percent of the loan balance, unless you're exempt.
• A credit report.
• Recording fees and recording taxes.
• Taxes, hazard insurance, flood insurance and assessments.
• Title examination and title insurance.
• Fees the VA has approved in advance as local deviations. Since February 2024 that includes a location-based assumption fee the VA approved in advance, charged on top of the processing fee when the assumption closes. So expect the servicer's total fee to come in above $300.

Anything not on that list can't be charged to you. The VA says so directly. The seller is allowed to pay the real estate commission.

Two details on the funding fee trip people up. It has to be paid in cash at closing. It can't be rolled into the loan like it can on a new VA purchase. And you don't pay it at all if you receive VA compensation for a service-connected disability, receive Dependency and Indemnity Compensation as a surviving spouse, or meet one of the VA's other exemptions, such as being on active duty and showing proof of a Purple Heart by closing.

Compare that to a new VA purchase loan, where the funding fee is 2.15 percent on first use with less than 5 percent down. On a $300,000 loan, that's the difference between $6,450 and $1,500.

The Catch: You Have to Cover the Equity Gap

Here's the part the "take over a 2.75 percent loan" videos leave out.

You don't get a new loan for the price of the house. You take over the balance that's left. Everything between that balance and the price is the seller's equity, and it's due at closing.

Here's how that looks with round numbers. These are for illustration, not a real listing.

Say a seller bought in 2021 with a $340,000 VA loan at 2.75 percent. Five years of payments later, the balance is about $300,900 and the principal and interest payment is about $1,388 a month. They list the house at $475,000.

• The gap you'd need to cover: about $174,100.
• Your funding fee if you're not exempt: about $1,500, in cash.
• Your payment on the assumed loan: about $1,388 a month in principal and interest, for the rest of the original term.

Now the other side. Borrow that same $300,900 as a new 30-year loan at 6.83 percent, the average 30-year VA rate from Mortgage News Daily on September 17, 2026, and principal and interest comes to about $1,968 a month. At the 7.19 percent conventional average the same day, it's about $2,040.

That's roughly $580 to $650 a month, for as long as you keep the loan. The question is whether that monthly saving is worth the cash you need to bring to the table.

How to Cover the Gap Without All Cash

You have three levers, and you can combine them.

Cash. Savings, proceeds from selling your current home, or both.

A second loan. The VA doesn't prohibit it. In 2024 it set out the rules for buyers who take out a second loan alongside an assumption:

• The second loan has to sit behind the VA loan. The VA loan stays in first position.
• The money can go to the seller's equity and to allowable closing costs. You can't take cash back.
• The second loan's payment counts against you when the servicer checks whether you qualify.
• The rate can be higher than the VA loan's rate. It's negotiated with whoever makes the second loan.
• If the second loan isn't assumable, that can limit your ability to sell to the next person by assumption. Worth knowing before you sign.

A price the math can carry. An assumable loan is a real selling advantage, and many sellers know it. But the gap is the gap. I'll show you the blended cost of the two loans side by side against a new loan before you write an offer, so you know what that rate is actually worth.

How Long Does a VA Loan Assumption Take?

Plan your contract around the VA's deadlines, not a standard purchase timeline.

When the servicer has what the VA calls automatic authority, it has 45 calendar days from receiving a complete application to approve or deny you. If it doesn't have that authority, it has 35 days to send your file to the VA, and the VA then has 10 business days to decide.

The word that matters is complete. The clock doesn't start until the servicer has everything. The paperwork is the same as for a VA purchase loan, because they underwrite you like one. Get your documents together before you're under contract, not after.

If the servicer turns you down, you or the seller can appeal to the VA within 30 days.

What If You're a Veteran Assuming the Loan?

Then you have a choice to make, and it matters as much to the seller as it does to you.

If you're an eligible veteran, you'll live in the home, and you have enough entitlement, you can substitute your entitlement for the seller's. The seller gets that entitlement restored to use on their next home. Your entitlement is now tied to this loan instead.

If you don't substitute, whether you're a veteran or not, the seller's entitlement stays tied to the loan until it's paid off.

Why that matters to you as a buyer: a veteran seller who needs their entitlement back for the next purchase has a real reason to prefer a buyer who can substitute. If you can, say so in your offer. To that seller, it can matter as much as price. I cover the seller's side of that decision in VA loan assumptions and the entitlement decision every veteran seller faces.

Do You Have to Live in the Home?

If you're substituting your entitlement, yes. The VA ties substitution to a veteran who intends to live in the home.

If you're not substituting, the VA's list of what makes an assumption approvable is the three items above: the loan is current, you're contractually taking full liability, and you're creditworthy. Occupancy isn't one of them. Confirm your specific situation with the servicer before you rely on it.

Where to Find a VA Loan You Can Assume

Assumable loans are easy to miss. The listing may not mention it, and the seller may not know it's worth mentioning.

I search for them every week in Spring Hill, Franklin and Thompson's Station, and I'll check any home you're looking at. The broader playbook on finding one and writing an offer that wins is in how to find and win an assumable home. And if you want the whole picture on VA, FHA and conventional loans here, start with assumable mortgages in Middle Tennessee.

Key Takeaways

• You don't have to be a veteran to assume a VA loan. You have to be creditworthy and take on full liability.
• The VA caps the processing fee at $300, allows an approved location-based fee on top, and bans anything not on its list.
• The funding fee is 0.5 percent of the balance, paid in cash at closing, and waived if you're exempt.
• You have to cover the gap between the loan balance and the price, with cash or a second loan behind the VA loan.
• The servicer has 45 days from a complete application to decide. Get your paperwork ready early.
• A veteran who can substitute entitlement has an edge with a veteran seller.

Frequently Asked Questions

Can a non-veteran assume a VA loan?
Yes. The VA requires that the loan be current, that the buyer be under contract and take on full liability, and that the buyer be creditworthy under the VA's standards. Military service isn't required. If the buyer isn't a veteran substituting their own entitlement, the seller's entitlement stays tied to the loan until it's paid off.

How much does it cost to assume a VA loan?
The VA caps the assumption processing fee at $300, plus approved local charges. The buyer pays a VA funding fee of 0.5 percent of the loan balance unless exempt, plus a credit report, recording fees, title, insurance and taxes. Fees not on the VA's list can't be charged to the buyer.

Can the VA funding fee be financed on an assumption?
No. On an assumption, the 0.5 percent funding fee has to be paid in cash at closing. It's waived for buyers who receive VA compensation for a service-connected disability and others the VA lists as exempt.

How long does a VA loan assumption take?
A servicer with automatic authority has 45 calendar days from a complete application to approve or deny it. Without that authority, the file goes to the VA within 35 days and the VA decides within 10 business days. A denial can be appealed to the VA within 30 days.

Can I get a second loan to cover the seller's equity?
Yes. The VA allows a second loan alongside an assumption as long as it sits behind the VA loan, doesn't give you cash back, and its payment is counted when you're qualified. Its rate can be higher than the VA loan's.

Ready to Take Over Someone Else's Rate?

If a lower payment on a home you already like sounds better than today's rates, let's find out whether there's an assumable loan behind it and what the gap really costs. I'll pull the numbers, put the two options side by side, and connect you with a lender who handles assumptions. Call or text me at 615-392-1186, or book a 15-minute call on my veterans page.