FHA, VA AND USDA LOANS CAN BE ASSUMED. CONVENTIONAL ONLY WITH LENDER CONSENT.

FHA mortgages originated before December 1, 1986 generally contain no restrictions on assumability, while those closed on or after December 15, 1989 require credit qualification of the borrower who wishes to assume (HUD Handbook 4155.1, VERIFIED). HUD requires the creditworthiness review to be completed within 45 days from the date the lender receives all necessary documents (VERIFIED, HUD 4155.1 Chapter 7). A VA loan may be assumed by a buyer who is not a veteran, provided the assumer is creditworthy under VA's credit and underwriting standards; a holder with automatic authority must complete processing within 45 calendar days of a complete application, and a funding fee of 0.5 percent of the loan balance is collected at closing and may not be financed (VERIFIED, VA Circular 26-23-10). USDA guaranteed loans can be assumed, with the lender reporting the transfer to the agency (PROBABLE, from a handbook summary).

On an FHA loan closed after December 15, 1989, the seller is released from personal liability only if the lender formally releases them after a creditworthy assumer executes an agreement to assume the debt; otherwise the seller remains liable (HUD notice to homeowner, VERIFIED). On a VA loan the original veteran's entitlement remains encumbered by the loan until it is paid in full, unless an eligible, occupying veteran assumer substitutes their own entitlement (VA Circular 26-23-10, VERIFIED).

The difference between the home's sale price and the balance on the assumed loan is what the buyer must pay, in cash or with their own additional loan (CFPB, VERIFIED). On top of it, an FHA lender may charge a processing fee that is reasonable and customary and not more than $900, plus third party costs and up to $45 for the release of liability papers (VERIFIED, FHA Mortgagee Letter 2016-24; the servicer quotes the current cap); a VA assumption carries the 0.5 percent funding fee at closing (VERIFIED). What stalls assumptions in practice is servicer capacity rather than the rule; VA has issued a circular reminding holders of their duty to process assumptions on time (PROBABLE).