Are VA Loans Assumable?

An assumable loan allows the buyer to take over the obligation of the seller's loan
with no change in loan terms. Generally, a loan without a "Due-On-Sale Clause" is assumable.

Advantages:

If loan rates have increased since the seller got the loan, the old loan may carry a lower interest rate than a new loan, and the buyer won't have to pay as much in fees.
Also, more of the monthly payments on the loan will be going toward the principal balance instead of interest because the loan term will be reduced by the time since the loan began.

VA Assumablility

There are two ways to assume a VA loan,but only one of them is a good idea for the seller.
First, if the new buyer is a qualified Veteran, he can "substitute" his eligibility for the eligibility of the seller. In addition, the new buyer qualifies through VA standards for the mortgage payment.
This is the safest way for a seller to allow their loan to be assumed. The new buyer is responsible for the loan and the seller has no further liablility for the repayment of the loan. By obtaining a "release of liability" from the VA, the seller can then use their full eligibility to purchase another home right away using their VA loan.

The second way is if the new buyer is not a veteran or qualified for a VA loan, they have no eligibility to give the seller. If the seller grants permission for the new buyer to take over their loan, the seller does not get back their eligibility to use on another home, and the seller is still liable for the payments should the buyer default!

For this reason, A VA seller and their realtor, should be very careful about offering their home with an assumable loan.

VA Loan Limits California Counties

County Limit
Alameda $962,500
Contra Costa $962,500
El Dorado $418,750
Los Angeles $593,750
Marin $962,500
Mono $512,500
Napa $443,750
Nevada $418,750
Orange $593,750
Placer $418,750
Sacramento $418,750
San Benito $633,750
San Diego $437,500
San Francisco $962,500
San Luis Obispo $487,500
San Mateo $962,500
Santa Clara $633,750
Santa Cruz $568,750
Ventura $486,250
Yolo $418,750