Trying to figure out how to buy a home from a friend with assumable VA loan

[Jeffrey Hill]

Hello,

Just wondering if anyone can help me figure out a lending strategy.

Here are the details:

A friend wants to sell us their house that currently has a VA loan mortgage.

They are a dual military couple so will use their other VA loan for their next house.

They are willing to let us assume their current loan.

Mortgage balance is $328K. They want to sell for $500K. This leaves a $172K gap. From my understanding, normally with a VA loan assumption. The lender wants you to put the entire difference down as a down payment, so $172K. We do not have that much to put down. It sounds like some lender will allow you to get a 2nd mortgage for that $172K amount and some will not.

Does anyone know of any lenders that can work with this? Or of any alternative strategies to make this work?

We thought about doing seller financing for the $172K but it will likely take 10+ years to pay the full amount at any sort of reasonable monthly payment. Maybe we can do seller financing for the $172K and then get a traditional mortgage after the fact with delayed financing? Or a personal loan if interest rates aren't cost prohibitive? I don't know, is this an impossible deal or is there some way to make this work?

Let me know if you have any suggestions, thanks.