Assumable Mortgage Seller Guide: How to Sell a Home With a Low-Rate FHA, VA, or USDA Loan

If you locked in a 2-4% FHA, VA, or USDA loan when rates were low, selling with an assumable mortgage can attract more buyers and potentially a higher sale price – because buyers get to keep your low payment instead of taking out a new 6-7% loan.

TL;DR Checklist

Here’s what to know about selling a home with a low-rate assumable mortgage at a glance:

• What it is: An assumable mortgage is where the buyer takes over a seller’s existing mortgage (rate, monthly payment and remaining balance) instead of taking out a new one.
• Why it matters: The low-rate loan makes the home more affordable, attracting more buyers for higher offers and a faster sale
• Eligible loans: FHA, VA, and USDA loans are assumable by law.
• Timeline: Servicer decision within 45 days; closing typically within 30 days of approval
• Process with Roam:

1. 1. Share loan details
   2. Receive eligibility confirmation and estimated sale proceeds
   3. List with a Roam Agent who markets the loan and home together
   4. Accept offer + close, in as little as 30-45 days

Assumptions 101

What is an assumable mortgage?

An assumable mortgage is when a buyer takes over a seller’s existing mortgage. That means the buyer inherits the terms of loan, such as: 

• The interest rate
• The monthly payment
• Any remaining balance on the mortgage

By law, any government-backed loan is assumable. This includes:

• FHA loans
• VA loans
• USDA loans 

Otherwise, the transaction works much like a traditional home sale where the seller is fully released from all liability.

Is Your Mortgage Assumable? (FHA vs. VA vs. USDA vs. Conventional)

Not every loan can be assumed. By law, government-backed loans — FHA, VA, and USDA — are generally assumable. These programs were designed to expand access to homeownership, and each allows a new qualified buyer to take over the seller’s existing loan.

Conventional loans, on the other hand, are not typically assumable because of due-on-sale clauses. These clauses require the full loan balance to be repaid when the property transfers ownership, preventing a new buyer from taking over the existing loan terms.

FHA Loans

An FHA loan (Federal Housing Administration) is insured by the U.S. Department of Housing and Urban Development (HUD). These loans are popular with first-time buyers and feature low down payments and fixed rates.

• All FHA-insured mortgages are assumable, as long as the buyer meets FHA credit and income standards.
• The servicer will review the buyer’s financials and confirm the loan is current before approving the assumption.

USDA Loans

A USDA loan (U.S. Department of Agriculture) is intended to promote homeownership in rural areas. These loans can also be assumed, though the process varies slightly.

There are two types of USDA assumptions:

• Same Rates and Terms Assumption: Used mostly for title transfers within families; the buyer takes over the original loan terms.
• New Rates and Terms Assumption: More common in traditional sales; the buyer assumes the remaining balance, which is re-amortized at current rates and terms.

VA Loans

A VA loan (Department of Veterans Affairs) helps eligible service members and veterans buy homes with favorable terms.

• VA loans are fully assumable, even by non-veterans, provided the buyer meets credit and income requirements.
• Sellers should understand two key concepts:
  • Release of Liability: Removes the seller’s financial obligation once the buyer assumes the loan.
  • Substitution of Entitlement (SOE): Restores the seller’s VA loan benefit when the buyer is a qualified veteran.

How to Confirm if Your Loan is Assumable

If you’re unsure whether your mortgage qualifies, here’s how to find out:

• Review your loan documents or online loan portal to confirm whether your mortgage is FHA, VA, or USDA — these loan types are generally assumable.
• Call your loan servicer and ask directly whether your specific loan allows assumption.

Pros and Cons of Selling With an Assumable Mortgage

Pros for sellers:

• Stand out in a high-rate market.
  Your low-rate mortgage makes your home more affordable to more buyers, helping your listing rise above comparable homes.

• Potential to sell faster and for more.
  Because buyers can inherit your lower monthly payment, they can often stretch farther on price — leading to stronger offers and a shorter time on market.

• A smoother experience with Roam.
  Roam manages the assumption process end-to-end, reducing friction for both sides and ensuring the sale moves forward cleanly.
  
  

Cons / considerations for sellers:

• Buyers still need to qualify.
  The assumption process includes a full credit and income review, and approval timelines can range from 45–60+ days depending on the servicer.
• The equity gap can require cash or additional financing.
  Buyers need to cover the difference between your remaining loan balance and the home’s sale price — either with cash or a second loan. Roam helps bridge this gap by offering secondary financing solutions with down payments as low as 5%, making assumptions accessible to more qualified buyers.
• VA sellers may have entitlement still tied up.
  If you’re a veteran seller with a VA loan, your VA entitlement may remain tied to the property if the buyer isn’t a qualified veteran and Substitution of Entitlement (SOE) isn’t possible — even though you’re fully released from liability.

Step-by-Step: How to Sell a Home With an Assumable Mortgage with Roam

1. Confirm Your Loan Type and Eligibility

• Start by sharing your loan details with Roam. We’ll verify that your loan is FHA/VA/USDA and eligible for assumption

Seller takeaway: You don’t need to be an expert in loan guidelines. Roam confirms whether your mortgage can be assumed for you.

2. Confirm Your Loan Type and Eligibility

Once eligibility is confirmed, Roam provides an estimate of:

• Your potential added net sale proceeds
• The equity gap: the difference between your remaining loan balance and the list price

Buyers will need to cover that gap with cash or secondary financing. Roam can help bridge this with secondary financing options with down payments as low as 5%, which opens the door to more qualified buyers.

Seller takeaway: You’ll see how much your low-rate loan is worth in today’s market — and how buyers can actually make the numbers work.

3. Prep Your Listing and Lead With the Rate

In today’s high-rate market, your low-rate mortgage is the headline. Roam connects you with a dedicated Roam Agent who knows how to market assumable mortgages so the payment advantage is clear.

Your listing will:

• Highlight your low interest rate and estimated monthly payment savings
• Call out that the loan is assumable (FHA/VA/USDA)

Seller takeaway: You’re not just selling a house — you’re selling a cheaper monthly payment, which can drive more interest and stronger offers.

4. List With a Roam Agent and Go Live

Once everything is ready, your Roam agent will go live with your listing, highlighting your low-rate home You can expect:

• 1-3 weeks on market
• 5× more offers than a traditional listing 

Seller takeaway: Your agent is trained to sell the rate and the home together, not just put another listing on the MLS.

5. Accept an Offer Contingent on Assumption Approval

When offers come in, your agent will help you:

• Compare price, terms, and buyer strength
• Structure the contract so it’s contingent on assumption approval from the servicer

Once you accept an offer, your Roam Agent coordinates:

• The purchase agreement
• The assumption application package required by your servicer

Seller takeaway: You don’t have to manage the paperwork or chase the servicer – Roam and your agent handle the assumption file for you.

6. Servicer Review (45-Day Decision Window)

After the assumption package is submitted, the loan servicer reviews the buyer’s file to confirm they meet program guidelines.

• Under FHA, VA, and USDA rules, servicers generally have 45 days from receipt of a complete package to issue a decision
  
• During this time, Roam and your agent stay in touch with the buyer and servicer to keep the process moving
  

Seller takeaway: Plan on up to ~45 days for the servicer to review and approve the assumption.

7. List With a Roam Agent and Go Live

Once the servicer approves the assumption, the transaction moves to closing. Roam coordinates final steps so the buyer seamlessly takes over your loan and you receive your payout.

Here’s what to expect:

• Closing timeline: Buyer and seller have up to 30 days to sign final documents, transfer title, and fund any equity gap
• Release of Liability: At closing, the seller is released from responsibility for future mortgage payments on the assumed loan
• VA sellers: If the buyer is an eligible veteran and Substitution of Entitlement (SOE) is completed, the seller’s VA entitlement can be restored for future use

Seller takeaway: At the end of the process, you’re out of the loan. For veteran sellers with SOE, your VA benefits are freed up for your next home.

Timeline & Who Approves 

Once a buyer and seller agree to move forward with an assumable mortgage, the approval process is handled by the loan servicer — the company that manages the existing loan. The servicer reviews the buyer’s application and confirms the assumption meets FHA, VA, and USDA program requirements.

What to expect:

• Decision timeline: Servicer must issue a decision within 45 days of receiving a complete assumption package
• After approval: The transaction moves to closing
• Closing timeline: Buyer and seller typically have up to 30 days to close and transfer ownership

Docs You’ll See 

Assuming a government-backed loan requires a set of standard documents to verify eligibility and process the transfer. While each servicer’s checklist varies, most FHA, VA, and USDA assumptions include:

• A formal assumption application
• Credit and income documentation
• Occupancy certifications
• A release of liability form (for sellers)

For VA loans, you’ll see:

• VA Form 26-6381 – Application for Assumption Approval: Used by the buyer to request assumption approval; includes income, debt, and credit details
• VA Form 26-8106 – Statement of Occupancy and Entitlement (SOE): Required only when the buyer is a veteran; documents occupancy intent and how VA entitlement will be used or restored
  

For FHA and USDA loans:

• Use similar documentation, though the specific form numbers vary by lender.

Seller takeaway: Every servicer uses its own version of these forms, but the core requirements — application, credit review, occupancy verification, and liability release — are consistent across programs.

Release of Liability vs Substitution of Entitlement (SOE) for VA loans

Release of Liability: Freedom from Payment Obligations

What it is:

• A document that releases the seller from mortgage payment responsibility after the assumption is approved

When it applies: 

• Available on all approved VA assumptions — regardless of whether the buyer is a veteran or civilian
• Loan must be current at closing
• Buyer must meet VA credit and income requirements

What it means for sellers: 

• If the new owner defaults later, the seller is not financially responsible

Seller takeaway: You’re protected from future payments once the assumption is approved, even if the buyer isn’t a veteran.

Substitution of Entitlement: Restoring the Seller’s VA Loan Benefit

What it is:

• Even after release of liability, the seller’s VA entitlement remains tied to the property unless SOE is completed

When it applies: 

• SOE is only possible when the buyer is an eligible veteran
• The buyer must have at least as much entitlement as the seller originally used
• The buyer must be willing to substitute their entitlement for the seller’s
• The buyer must be qualified for the VA’s Home Loan COE (Certificate of Eligibility) and occupancy guidelines

What it means for sellers:

• Without SOE, the seller’s entitlement is tied up until the assumed loan is paid in full
• This can limit the seller’s ability to use their VA benefits for their next purchase

Seller takeaway: Only veteran sellers need to consider SOE, and it’s the only way to restore VA entitlement for future home purchases.

The New VA Acknowledgment Form (26-10291)

The VA introduced Form 26-10291, the Assumption Entitlement Acknowledgement, to ensure veterans fully understand how an assumption impacts their VA home loan guaranty entitlement. The official form can be accessed through the VA's website here.

Here's the bottom line:

• If the buyer is not a veteran: Seller gets release of liability, but entitlement stays tied to the property
• If the buyer is a veteran: Seller should request SOE to restore their entitlement for future use

Seller takeaway: This form ensures you understand how your VA benefits are affected and is required in every assumption file. 

Costs and Fees: What Sellers and Buyers Should Expect

While fees vary by loan type and servicer, here are the general assumable mortgage fees charged by the servicer and who pays what:

• FHA loans: The U.S. Department of Housing and Urban Development (HUD) caps the FHA assumption fee at $1800
• VA loans: The Department of Veterans Affairs allows a 0.5% funding fee based on the remaining loan balance
• USDA loans: Assumption fees typically range from $350–$500, depending on the servicer
  
  

These fees are generally paid by the buyer at closing.

Frequently Asked Questions About Assumable Mortgages for Sellers

Is selling a house with an assumable mortgage better for sellers?
Yes. In today’s high-rate market, a low-rate assumable mortgage makes your home more affordable, resulting in more buyer interest, higher offers, and a faster sale.

How long does it take to sell with an assumable mortgage?
The timeline is similar to a traditional sale: 

• Weeks 1–3: List the home and attract buyers
• Weeks 3–4: Accept an offer and submit the assumption package to the servicer for approval
• Weeks 4–10: The sale is finalized and Roam manages the assumption and closing process

Will I still be on the hook if the buyer stops paying? (Release of liability vs SOE)
No — once the assumption is approved, you receive a formal release of liability.
This removes your responsibility for the loan going forward, even if the buyer defaults later.

For veteran sellers, in addition to the Release of Liability, there is also Substitution of Entitlement (SOE):

• Release of Liability = You are no longer responsible for payments.
• Substitution of Entitlement (SOE) = Determines whether your VA loan benefit is restored.

If the buyer isn’t a qualified veteran and SOE isn’t completed, your entitlement may remain tied to the property, even though you’re fully released from liability.

Can I use my VA benefit again after an assumption?

Yes — but it depends on how much entitlement you have left.

• If Substitution of Entitlement (SOE) is completed (only possible when the buyer is an eligible veteran), your full entitlement is restored and you can use your VA benefit again with no restrictions.
• If SOE is not completed, your entitlement remains tied to the assumed loan — but you may still be able to use any remaining entitlement toward another VA loan, depending on loan limits in your area.

In that situation, you’re still fully released from liability, but you may have reduced VA buying power until the original entitlement is restored or the assumed loan is paid off.

Can I sell for more because my mortgage is assumable?

Yes. A low-rate assumable mortgage can meaningfully increase what buyers are willing to pay. Because the buyer inherits a lower monthly payment than they would get with a new mortgage at today’s rates, they can often stretch farther on price. Assumable listings frequently attract more offers, reduced negotiation pressure, and higher net proceeds for sellers — especially when marketed correctly.

Make more for your home

With Roam, you’re not just selling your home — you’re selling the value of your low rate. We make it easy to market that advantage, attract serious buyers, and close with confidence. Get started today