Assumable loans: the basics
Some government-backed loans can be assumed by a qualified buyer at the seller's existing rate. What that means and what it takes.
What an assumption is
Certain loans — generally FHA, VA, and USDA — allow a qualified buyer to take over the seller's existing mortgage, keeping its interest rate and remaining term, instead of financing the full price at today's rates.
The catch: the equity gap
The buyer assumes the loan balance, not the price. The difference between the price and the balance — the seller's equity — has to be covered in cash or with separate financing. The larger the gap, the less an assumption helps.
Qualification still applies
The buyer must qualify with the loan's servicer, and the process runs on the servicer's timeline. VA assumptions have entitlement considerations for the seller worth understanding before listing.
For listings
When a listing carries an assumable loan at a below-market rate, that is a real, quantifiable marketing point. Dream Team property pages can present the assumption math alongside conventional financing so buyers can compare.
Questions about your situation?
A Dream Team loan officer can run your actual numbers.
Find your loan officerThis guide is general information, not financial advice, a quote, or loan terms. Program availability and qualification vary. ALCOVA Mortgage LLC, NMLS #40508 (www.nmlsconsumeraccess.org). Equal Housing Lender.