Re: VA Qualifying Assumption Questions - Posted by Dave T
Posted by Dave T on June 07, 2007 at 14:49:53:
Your question has two components, loan assumption and restoration of entitlement.
As I understand the VA loan rules, any owner-occupant buyer who meets the lender’s qualifying criteria can assume your VA loan. The buyer does not need to be a veteran, but must meet all the credit and income criteria normally required for a new loan. The original borrower will remain liable for the loan, even though the buyer has assumed the loan.
Reinstatement of entitlement can be accomplished in two ways. First sell the property or otherwise pay off your VA loan. Then apply to the VA for reinstatment of entitlement if you want to apply for another VA loan.
The second way is to allow your VA loan to be assumed with a release of liability. In this case the veteranâ??s eligibility can be restored only if the qualified assumer is also an eligible veteran who is willing to substitute his or her available eligibility for that of the original veteran. Otherwise, the original veteran cannot have eligibility restored until the assumer has paid off the VA loan.