By Joe Nelson — Retired Air Force, Nelson Home Group Team Leader and Mortgage Loan Originator
If you took out a VA loan when rates were low, that loan may now be worth more to a buyer than anything else about your house, and yes, it is assumable. What most sellers do not hear until closing week is that letting someone assume it can cost them the use of their own benefit. Unless the buyer is an eligible veteran who puts their own entitlement on the loan through VA Form 26-8106, your entitlement stays attached to that loan until it is paid in full, even after VA releases you from personal liability.
Joe walks through this on video: VA Loan Assumption: Assumable Mortgage Dream or Trap?.
This page is the seller’s half of that decision, and the full picture on VA financing across the metro starts at the veterans hub.
Is my VA loan actually assumable, and who do I ask?
Almost certainly yes, but the transfer needs approval, and the only office that can tell you where your loan stands is the servicer you send your payment to. Under 38 U.S.C. 3714(f)(1)(A), that approval requirement applies to loans for which commitments were made on or after March 1, 1988, which covers essentially every VA loan closed in the last three decades.
Call the servicer, not your original loan officer, since the company that funded the loan is usually not the one servicing it today. Ask whether it holds automatic authority to approve an assumption itself or has to send the file to VA for prior approval, because that answer drives your timeline, and get the balance, note rate, remaining term, escrow balance and fee schedule in writing. If the servicer stalls you have leverage, because Circular 26-23-27, dated December 20, 2023, warns holders that on a finding of noncompliance VA will assert a defense against liability and refuse to pay any guaranty claim. Our post on how a VA loan assumption works in Kansas City covers the mechanics.
How do I market an assumable rate without overpromising?
Advertise only the loan terms you can document from a servicer statement, and say nothing about approval, because you do not control whether any particular buyer qualifies. The three conditions in VA Circular 26-23-10, dated May 22, 2023, are that the loan is current, the assumer is contractually obligated to purchase the property and to assume full liability, and the assumer is creditworthy under VA’s credit and underwriting standards.
Write the remarks the way an underwriter would read them, giving the note rate, the unpaid principal balance and the remaining term with the date of the statement you pulled them from, and skip the monthly payment unless you break out principal, interest, taxes and insurance, because the buyer’s escrow will not match yours. Never promise a thirty day assumption or claim that any buyer can assume. A buyer does not have to be a veteran, but a buyer does have to pass a full credit review, and who can assume a VA loan lays out the categories.
Why does an assumable loan shrink my buyer pool?
Because the buyer has to cover the entire gap between your sale price and the remaining loan balance in cash, and an assumption does not come with a new first mortgage to fill that gap. Run the arithmetic before you list, since a current opinion of value minus the unpaid principal balance plus the buyer’s closing costs is what the buyer has to produce. Our home value tool is the starting point.
There is one release valve. VA Circular 26-24-17, dated August 11, 2024, states that VA does not prohibit an assumer from obtaining a junior lien in conjunction with an assumption. That lien has to sit behind the VA loan, the proceeds may pay allowable closing costs or amounts due the seller, the assumer is not to receive cash back and the rate may exceed the rate on the VA guaranteed loan, which blends the buyer’s cost back toward a normal mortgage. The buyer’s side of the math is in how much cash it takes to assume a VA loan.
How long does the servicer take, and how do I write that into the contract?
VA allows a servicer with automatic authority 45 calendar days to process an assumption, and a holder without it 35 calendar days just to submit the package to VA, so a standard thirty day closing is not realistic. Circular 26-23-10 also gives VA 10 business days to decide a prior approval request or an appeal once it has a complete package, and requires closing within 30 calendar days after VA approval.
Write the contract to match that. Set closing off the approval event rather than a fixed date, name an outside date after which either party may terminate, state who pays each charge and require the buyer to apply within a short, specific number of days after acceptance, since the clock does not start until the servicer has a complete file. Our post on how long a VA loan assumption takes covers the timing.
What will the assumption actually cost, and who pays it?
The servicer’s processing fee is capped, but the cap is not the whole bill. Circular 26-23-10, Change 1, dated February 23, 2024, states that the holder may charge an assumption processing fee not to exceed $300, and that $50 of it must be returned to whoever paid it if the loan remains disapproved after 60 calendar days.
The charge people miss is the one VA approved separately. Circular 26-24-5, dated February 26, 2024, authorized an Assumption Locality Variance in advance, charged in addition to the $300 processing fee and based on the geographical location of the subject property, and Exhibit A sets the Midwest amount at $386. Missouri and Kansas both sit in VA’s Midwest grouping. All of these circulars were still listed as valid and not rescinded on VA’s circulars page when I checked on September 16, 2026. The funding fee on an assumption is 0.5 percent of the loan balance, collected in cash rather than financed. Who pays each item is negotiable, so put it in the contract, and if you are weighing the next neighborhood our featured communities pages are a place to start.
On the entitlement side, what happens to your benefit when a non veteran assumes, what VA warns about if that person later defaults, and whether you should allow an assumption at all if you plan to buy again, are covered in full on our page about using your VA loan again after someone assumes it.
Who this applies to and who it does not
This page is for a veteran who holds a VA guaranteed loan and is thinking about selling to a buyer who will assume it. It does not apply if your loan is conventional, FHA or USDA, since those programs have their own assumption rules, and it does not apply to a loan committed before March 1, 1988, which is freely assumable without the approval process described here.
It also may not matter much if you never intend to use a VA loan again, because a veteran who is done buying or who is paying cash for the next house can allow an assumption without the entitlement question biting. The trap only closes on people who need the benefit later, which is why the first question I ask a seller is what the next house looks like.
Frequently asked questions about selling with an assumable VA loan
Can I get my VA entitlement back after someone assumes my loan?
Only in two situations. Either the assumer is an eligible veteran with sufficient entitlement who completes a substitution of entitlement on VA Form 26-8106 at the time of the assumption, or the loan is eventually paid in full. VA Form 26-10291 states that your entitlement will still be tied to the loan unless the assumption includes that substitution.
Does a release of liability restore my entitlement?
No. Release of liability and restoration of entitlement are separate things. Under 38 U.S.C. 3714 an approved release relieves you of all further liability to the Secretary with respect to the loan, including any loss from a default by the purchaser, but your entitlement remains tied to that loan until it is paid in full or a substitution of entitlement is completed.
Can a non veteran assume my VA loan?
Yes. VA does not require the assumer to be a veteran. Circular 26-23-10 requires only that the loan is current, that the assumer is contractually obligated to purchase the property and assume full liability, and that the assumer is creditworthy under VA’s standards. The cost to you is that a buyer who is not a veteran cannot substitute entitlement, so yours stays tied to that loan.
How much can my servicer charge to process the assumption?
The processing fee is capped at $300 under Circular 26-23-10, Change 1, and $50 of that must be refunded if the loan remains disapproved after 60 calendar days. Circular 26-24-5 also allows an Assumption Locality Variance based on where the property sits, set at $386 for the Midwest region that includes Missouri and Kansas, and the funding fee is 0.5 percent of the loan balance, collected in cash.
Where can I see homes for sale and current prices in Kansas City?
You can browse current listings and pricing across the metro on our home search page, and if you want a value estimate on the house you are selling, start with our home valuation tool and let us verify it against recent closed sales nearby.
Ready to make the move?
Ready to make the move? Work with the top-rated team serving Kansas City veterans — or call us at 816-680-6624.
Equal Housing Opportunity
Nelson Home Group is committed to the Fair Housing Act. We do not discriminate on the basis of race, color, national origin, religion, sex, familial status, or disability. School district and neighborhood information on this page is provided for factual informational purposes only and does not constitute a recommendation to purchase in any particular area. All buyers are encouraged to independently research neighborhoods, schools, and communities to determine the best fit for their individual needs.
Joe Nelson is a licensed Realtor in Missouri and Kansas, and a licensed mortgage originator in Missouri and Kansas (NMLS #2547018). Joe cannot serve as both Realtor and loan officer on the same transaction. This page is educational and is not an offer of credit or a commitment to lend. Loan products, rates and qualification are subject to underwriting and may change. Eligibility determinations are made by the U.S. Department of Veterans Affairs.