VA Assumption question - Posted by Mark (SDCA)

Real Estate Investing
1

Posted by Dave T on February 29, 2000 at 23:04:16:

If you are a veteran with VA eligibility, then you can substitute your loan eligibility for his and assume the existing loan. The VA will then reinstate the seller’s eligibility.

Otherwise, you are correct, the only other way is to pay off the existing loan.

2

VA Assumption question - Posted by Mark (SDCA)

Posted by Mark (SDCA) on February 29, 2000 at 18:07:09:

I have a seller who has a freely assumable VA loan. He just wants out, willing to let me assume it. I don’t mind paying the costs. What I DON’T want to do is get a new loan.
The problem is that he wants his certificate (of eligibility) back. The way I am reading it from the VA web page is that the only way that happens is if the loan is paid off.
Any ideas here??

Thanks,

Mark

3

Re: VA Assumption question - Posted by JPiper

Posted by JPiper on March 01, 2000 at 18:03:32:

Mark:

Irwin is correct. A Veteran may use his eligibility up to the VA max (something just over $200K if I’m not mistaken). This means that he can have more than one loan…as long as the balances don’t exceed the maximum, and as long as he qualifies according to income.

Just so that you know, there are many loan officers and mortgage brokers who don’t understand this, and therefore you will find lots of misconceptions regarding this out there. I’ve done this type of transaction several different times.

JPiper

4

Re: VA Assumption question - Posted by Branden

Posted by Branden on March 01, 2000 at 17:11:43:

Another option is to find a friend or relative with a VA certificate that they’re not using. While this is rare, it is possible. You do all the work and give them part of the action in exchange for their certificate and use of their credit.

5

Re: VA Assumption question - Posted by Irwin

Posted by Irwin on March 01, 2000 at 16:58:56:

I vaguely remember someone at VA once telling me that if the Vet didn’t use ALL of his eligibility on the mortgage loan he can still use the amount left on another loan. That would mean that if the VA eligibility is $125k and he only used $50k for his first loan, he can still use the $75k balance on another purchase.
Also, there might be a way he can get released if the new buyer qualifies, assumes, and the loan has been paid on for so many years that there is substantial equity in the property. However, I’m, not certain of either of these point, so check them out.