Quote from @Eric W.:
Quote from @Ryan Thomson:
Quote from @Eric W.:
I wanted to follow up on this thread because I am getting so much conflicting information on this topic. MOST things you read online say the VA assumable loan is intended for primary residence and you must occupy the home for certain amount of time.
However, according withroam.com which specializes in VA/FHA loan assumptions, you can assume va loans for investment. Below is straight from their FAQ:
"VA loan assumptions do not require the home to be your primary residence, making them a great option for real estate investors. If you’re interested in assuming a VA loan, you will be required to purchase the home in your name and have enough cash to cover the seller’s equity in the home. The seller must also be okay with foregoing their entitlement until the loan is paid off.
But, FHA loan assumptions require the home to be your primary residence. To qualify to assume an FHA loan, the property must be your primary residence for a minimum of one year. This means you must live in the home for more than six months out of the year."
So which is it? How can they definitively say that VA loans can be assumed for investment when there is so much out there saying otherwise?
Hey Eric. I have had a handful of buyers assume VA properties as investors last year. This is the only loan type that can be assumed by an investor. FHA and USDA loans are also assumable, but you must intend to occupy the home for 6 months.
Hey, could provide me more details on how these worked from your past experiences? I’d really like to explore this route as a possibility if it’s allowed. I have seen so much conflicting information online, but most of it says VA loans need to be for primary residence ie need to live in it. I have enough remaining entitlement to pursue this as well as down payment funds available. I’ve just never looked into it to seriously because every time I look into it I end up reassuring myself it can’t be done. I’ve considered just calling the VA to ask as well but haven’t done it.
@Eric W. Assumptions were super popular in the 80s. But it has been irrelevant for 40 years because rates just dropped. So there is a lot of people refiguring out how this works and what the rules are. The mortgage servicers, agents, buyers, sellers, etc. Everyone is learning how these work again. The knowledge out there is sometimes change as new closings set new precedents. Here is what you need to know (and I'm happy to jump on a call if you would like):
1. As a veteran if you assume another veterans VA loan it frees up their entitlement. This is a win for everyone!
2. VA loans can be assumed by anyone (investor, veteran who doesn't want to use their entitlement, and non-veteran) so long as the seller is willing to leave the portion of their entitlement that they used with the house. This of course needs to be made clear to the seller. And then they decide what is best for them.
3. As a veteran who already used a portion of their entitlement you need to have enough remaining entitlement in order to assume the entitlement that the seller used at the time of their purchase. You can NOT have a portion of it. It is all or nothing.
4. If you want to really know if you can assume another loan here is what you'll have to do:
Check with the VA to see how much COE you have left.
Check with the seller to see how much COE they used to purchase the property
Is the amount you have left more than what the seller used to purchase the property.
To confirm how much eligibility remains, the seller/buyer can easily request a Certificate of Eligibility (COE) online. This provides clarity on the seller's remaining VA entitlement, enabling informed decisions about future home purchases. https://www.va.gov/housing-assistance/home-loans/request-coe-form-26-1880/introduction.
