VA Assumable Loans in DFW: How They Work, Who Can Use Them, and What to Watch For
- Holt Homes
- Aug 22
- 4 min read
Short version: A VA assumable loan lets a buyer take over a seller’s existing VA mortgage—same rate, same remaining balance, same time left—with the servicer’s approval. Non-veterans can assume a VA loan, but the seller’s VA entitlement may stay tied up unless a qualified Veteran buyer substitutes their own entitlement. There’s usually a 0.5% VA assumption funding fee at closing, plus normal closing costs. BenefitsVeterans Affairs
Why VA assumptions matter right now
If a seller locked a low rate a few years ago, an assumption can mean a materially lower payment for today’s buyer—and a marketing edge for the seller. We’re seeing more shoppers ask for these in North Dallas suburbs like Frisco, Plano, and McKinney because payment savings can be real in a higher-rate market.
Who can assume a VA loan?
Any creditworthy purchaser—Veteran or non-Veteran—can be approved by the loan holder/servicer to assume a VA loan. The servicer evaluates credit, income, and debt just like any mortgage file. Benefits
If the buyer is a Veteran and has enough entitlement, they can substitute their entitlement at closing. That substitution can free the seller’s entitlement for their next VA purchase. If the buyer is not a Veteran (or doesn’t substitute), some or all of the seller’s entitlement stays tied to the loan until it’s paid off or refinanced. Benefits
How the process works (DFW flow)
Confirm assumability + call the servicer We verify the current loan and connect with the servicer’s assumption team for their checklist, required forms, and fees.
Buyer qualifies The servicer underwrites the buyer for credit and income. Any purchaser may qualify if they meet VA/servicer standards. Benefits
Solve the equity gap Purchase price minus loan balance = cash needed. VA doesn’t prohibit the assumer from using a junior lien (second loan) to bridge equity—subject to all program and servicer rules. Benefits
Approval, fee, and closing On VA assumptions there’s typically a 0.5% VA funding fee charged at closing (certain borrowers may be exempt under VA rules). Many servicers also charge a capped processing fee. Veterans AffairsBenefits
Cost & timeline snapshot
VA funding fee (assumption): 0.5% of the loan balance, due at closing; VA guidance notes it’s not financed into the loan balance. Some assumers may qualify for a fee waiver under VA rules. Veterans AffairsBenefits
Processing fee: Servicers may charge an assumption processing fee within VA caps. Benefits
Timing: When the servicer has automatic authority, VA directs them to decide within ~45 days of a complete application. (Actual closings depend on file quality and title.) Benefits
Occupancy, release of liability, and entitlement—three must-knows
1) Occupancy. VA loans are designed for owner-occupancy. If a Veteran buyer is substituting entitlement, VA specifies they must intend to occupy the home. For other scenarios, the servicer will apply VA rules and any lender overlays—plan on an occupancy discussion during approval. Benefits
2) Release of liability (ROL). Sellers should seek a formal release of liability from VA/the servicer at closing so they’re not on the hook if the future borrower defaults. VA also notes that loans made on or after March 1, 1988 require approval by the holder/VA before transfer. Benefits
3) Entitlement. If the buyer isn’t a Veteran (or a Veteran who doesn’t substitute entitlement), the seller’s entitlement can remain tied to the assumed loan until it’s paid off or refinanced. This can affect the seller’s next VA purchase power. Benefits
Pros & cons at a glance
Pros
Keep the seller’s lower interest rate → lower monthly payment.
Often lower total closing costs than originating a brand-new first mortgage.
Marketing edge for sellers in DFW—“VA Assumable” drives traffic.
Cons / Watch-outs
DFW example (simple math)
A seller in Frisco owes $310,000 on a VA loan; the home’s market value is $460,000.
Buyer assumes the $310,000 VA loan at the existing rate (with approval).
Buyer covers ~$150,000 via cash or an approved second lien.
Result: Buyer’s payment reflects the older, lower rate, which can be a meaningful monthly savings vs. a new loan today.
Buyer checklist
Recent pay stubs/W-2s or returns, bank statements, and credit pull for the servicer
Plan to cover the equity gap (cash and/or junior lien if permitted) Benefits
Expect a 0.5% VA funding fee at closing (unless exempt) Veterans Affairs
Build time for the servicer’s approval window Benefits
Seller checklist
FAQs
Do I have to be a Veteran to assume a VA loan? No. Non-Veterans can assume with servicer approval and full credit qualification. Benefits
Can I use a second loan to bridge the equity? VA doesn’t prohibit a junior lien with an assumption; the servicer must ensure all requirements are met. Benefits
How long does it take? Guidance tells servicers with automatic authority to issue a decision within ~45 days of a complete application; actual closing can vary. Benefits
What’s the VA assumption funding fee? 0.5% of the loan balance, paid at closing; certain borrowers may be exempt under VA rules. Veterans Affairs
Want the list of assumable opportunities around DFW?
We keep an updated list of assumable loan opportunities across DFW. If this is something you’d like to explore, reach out today, and let’s schedule a time to chat. I’ll walk you through current options, answer your questions, and help you decide if an assumable loan is the right move for you.
Angela HoltRealtor® | Holt Homes TX at Kindred Realty Texas Division
Helping you move smart in life’s next chapter 🧡📍
Serving Frisco • Dallas • North DFW
Angela@KindredSold.com || 469-960-4439
Disclosure: This post is for educational purposes only and isn’t legal or financial advice. Loan eligibility, fees, and timelines are controlled by the lender/servicer and VA program rules—verify details for your specific situation.
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