Veterans: You May Not Have to Pay Today’s Mortgage Rates

If you're a veteran thinking about buying a home in Portland or Vancouver, WA, you may assume that getting a new VA loan at today's interest rate is your only option. It isn't.

VA loans are assumable. A qualified buyer can take over an existing homeowner's VA mortgage, including the remaining loan balance, interest rate, and loan term. That means a home seller with a VA mortgage at 2.75%, 3%, or 3.5% may be able to sell the home and let the buyer take over that loan instead of paying it off at closing.

I currently track more than 350 homes for sale throughout the greater Portland and Vancouver area with assumable VA mortgages. Nearly 250 of them have rates between 2.25% and 4%. 

For a veteran planning to buy a home, taking over one of these existing loans could mean a significantly lower monthly payment or more buying power than getting a completely new mortgage at today's rates.

If you want a broader explanation of how both FHA and VA assumptions work, you can also read my Assumable Mortgages in Portland & Vancouver: The Complete FHA and VA Guide.

How Does Assuming Someone Else's VA Loan Work?

With a typical home purchase, the seller's mortgage is paid off at closing and the buyer gets a new loan. A VA loan assumption works differently. Instead of paying off the seller's VA mortgage, the buyer takes it over.

Let's say a home seller has $425,000 remaining on a VA mortgage at 2.75%. If you qualify for the assumption, you take over that $425,000 loan at 2.75% and continue with the remaining term of the existing mortgage.

You're not finding a lender willing to give you a brand-new 2.75% VA loan. You're taking over a loan that already exists.

The buyer still has to qualify for the assumption. VA requires the purchaser to meet its credit and income underwriting standards, and the existing loan has to be current when the assumption closes.

Why Could an Assumable VA Loan Give You More Buying Power?

The interest rate has a huge effect on a mortgage payment. If you're financing several hundred thousand dollars at 3% instead of taking out a new loan at a much higher rate, the principal and interest payment on that money can be significantly lower.

That can work in two ways. You may be able to buy the same home with a lower monthly payment, or the lower payment may allow you to consider a more expensive home while staying within the same monthly budget.

The amount left on the assumable loan matters too. A $450,000 VA mortgage at 3.25% may be more valuable to a buyer than a $175,000 VA mortgage at 2.5% because a much larger portion of the purchase price is being financed at the low rate.

We always need to look at the interest rate and the remaining loan balance when evaluating an assumable VA mortgage.

Do You Have to Be a Veteran to Assume a VA Loan?

No. A qualified non-veteran can assume a VA loan too.

Being a veteran can be advantageous when the seller is also a veteran. If the buyer is an eligible veteran with sufficient VA entitlement, they can apply to substitute their entitlement for the seller's as part of the assumption. When a Substitution of Entitlement is completed, the seller's entitlement can be restored for use on another VA loan.

If a non-veteran assumes the loan, or a veteran buyer doesn't have enough entitlement to complete the substitution, the seller's VA entitlement remains tied to that mortgage until the loan is paid off. The seller may still have enough remaining entitlement to use another VA loan, but depending on their situation, it can limit or prevent them from using their VA benefit again in the meantime.

For a veteran seller who wants their entitlement restored, an offer from another eligible veteran who can complete the substitution may be more attractive than an assumption by a non-veteran.

How Much of the Seller's VA Loan Is Left?

A low interest rate is only part of the equation. We also need to know how much money is still owed on the mortgage.

Let's say a home is selling for $550,000 and the seller has $425,000 remaining on their VA loan at 2.75%. You may be able to assume the $425,000 mortgage at 2.75%, but the home still costs $550,000. That leaves a $125,000 difference between the purchase price and the remaining VA loan balance.

The buyer needs a way to cover that difference.

If the seller bought recently or put very little money down, the loan balance may be relatively close to the purchase price. In other cases, the seller may have owned the home for years and built a substantial amount of equity.

Two homes with the exact same 2.75% VA interest rate can be very different opportunities depending on how much is left on each loan.

What If You Don't Have Enough Cash to Cover the Difference?

You don't necessarily have to cover the entire difference with cash.

VA allows secondary financing to be used in connection with a VA loan assumption. That means a buyer may be able to use a second mortgage to finance some of the difference between the assumable VA loan balance and the purchase price. The existing VA mortgage has to remain in first position, and the buyer still has to qualify for both loans. VA allows the secondary financing to be used for amounts due to the seller at closing.

Using the same example, suppose the home sells for $550,000 and you're assuming a $425,000 VA mortgage at 2.75%. There is $125,000 left to cover.

A buyer with $50,000 available might be able to put that toward the purchase and finance another $75,000 with a second mortgage rather than coming up with the entire $125,000 in cash.

The second mortgage will have its own interest rate and monthly payment, so we need to look at both loans together. A very low rate on the first mortgage can still create substantial savings even if a smaller portion of the purchase has to be financed at a higher rate.

Can You Assume a VA Loan With Zero Down?

Sometimes, although most VA assumptions won't work exactly like a new zero-down VA purchase loan.

One of the biggest advantages of traditional VA financing is that a down payment generally isn't required. With an assumption, the amount you can take over is limited to what the seller still owes.

If a $500,000 home has a $495,000 VA mortgage, there isn't much difference for the buyer to cover. If the seller only owes $325,000, the situation is completely different.

Secondary financing can reduce how much cash you need to bring into the purchase, but it doesn't automatically turn every assumption into a zero-down transaction.

Before getting too excited about a particular low-rate loan, we need to know how much is left on it, how much of the purchase price can be financed at that rate, and what our options are for the rest.

Does the Seller Have to Let You Assume Their VA Loan?

No. The loan is assumable, but the seller still decides which offer they want to accept.

An assumption often takes longer than a typical financed purchase. The seller may need to close quickly, may have another offer that's easier to complete, or may have concerns about what happens to their VA entitlement.

Finding a home with a 2.75% VA mortgage isn't enough. We also need to write an offer that gives the seller a reason to work with us.

For a veteran buyer, being able to substitute your entitlement for the seller's can help. Price, flexibility, financial strength, closing timeline, and how the offer is structured can matter too.

How Long Does a VA Loan Assumption Take?

VA assumptions usually take longer than a typical financed purchase.

The buyer applies through the seller's existing mortgage servicer, provides the required financial documents, and goes through underwriting before the assumption can be approved. The exact timeline depends on the servicer and how quickly everyone provides the required information.

We need to account for that when writing the offer, especially if the seller has a specific closing deadline.

How Do You Find Homes for Sale With Assumable VA Loans?

This is where things get tricky.

Most home search sites are built around price, location, bedrooms, bathrooms, square footage, school district, and property type. They usually aren't built to tell you what type of mortgage the seller has, what their interest rate is, or how much they still owe.

I currently track more than 800 homes for sale throughout the greater Portland and Vancouver area with assumable FHA or VA mortgages. Hundreds of these loans have rates between 2.25% and 4%.

I don't publish that list online. I review it with buyers during a buyer consultation because a low mortgage rate by itself doesn't tell us whether the property is actually a good opportunity.

We need to know what you're looking for in a home, how much of the assumable mortgage is left, how much money is needed to cover the difference between the loan balance and purchase price, whether secondary financing makes sense, and whether we can put together an offer the seller is willing to accept.

Once we understand what you're looking for and what your financing looks like, we can narrow hundreds of homes down to the ones that actually fit.

If you're a first-time buyer interested in FHA financing, I also wrote a separate guide on how assumable FHA loans can help buyers access low interest mortgages: First-Time Home Buyers: You May Still Be Able to Get a 3% Mortgage.

Is Assuming a VA Loan Better Than Getting a New VA Loan?

It depends on the property and the numbers.

A new VA loan has some major advantages. VA generally doesn't require a down payment, there's no monthly private mortgage insurance, and the buyer isn't limited by the amount remaining on someone else's mortgage.

An assumption offers something a new VA loan may not be able to give you: an existing interest rate from the low-rate years.

If you're able to assume a large mortgage balance at 2.75% or 3% and cover the seller's equity without stretching your finances, the difference can be significant.

If the assumable balance is small and you need a large second mortgage to complete the purchase, a new VA loan may make more sense.

Compare both options before deciding.

How Do You Find Out Which VA Financing Option Makes Sense for You?

We start by looking at what you're trying to buy, where you want to live, what monthly payment you're comfortable with, how much cash you have available, and how much of that cash you actually want to use toward the purchase.

From there, we can compare a traditional VA purchase loan with the homes I'm tracking that already have assumable VA financing. For the assumable options, we'll look at the rate, remaining loan balance, amount needed to cover the seller's equity, and whether secondary financing could help.

Because I'm both a Realtor and Principal Broker and a licensed Mortgage Loan Originator, I can look at the property and financing together instead of treating them as two separate conversations.

If you're a veteran thinking about buying in the Portland metro or Vancouver area, schedule a buyer consultation with the Brandon King Real Estate Group. We'll look at the homes that fit what you're actually looking for and compare the financing options to see what makes the most sense.

Frequently Asked Questions About VA Loan Assumptions

Are VA loans assumable?

Yes. VA-backed home loans are assumable. The buyer has to qualify, the existing loan has to be current, and the assumption has to be approved.

Are FHA loans assumable too?

Yes. FHA loans are assumable as well. For first-time buyers, an existing FHA mortgage with a low rate can sometimes provide another way to lower the monthly payment or increase buying power. I explain how qualification, occupancy, the remaining loan balance, and second mortgages work in First-Time Home Buyers: You May Still Be Able to Get a 3% Mortgage.

Do I have to be a veteran to assume a VA loan?

No. A qualified non-veteran can assume a VA loan. An eligible veteran with sufficient entitlement may be able to complete a Substitution of Entitlement, which can restore the seller's VA entitlement.

Do I get the seller's existing VA mortgage rate?

Yes. You're taking over the existing VA mortgage rather than replacing it with a new first mortgage, so the existing interest rate and remaining loan term stay with the loan.

Can I use a second mortgage with a VA loan assumption?

Yes. VA allows secondary financing with an assumption as long as the VA mortgage remains in first position and the applicable requirements are met. The second loan can be used to help pay amounts due to the seller at closing.

Can a VA loan assumption be zero down?

It can be possible when the remaining loan balance is close to the purchase price or the rest of the purchase can be financed appropriately. Most assumptions will have some difference between the sales price and the amount left on the existing VA loan that has to be covered with cash, additional financing, or both.

Is There a VA Funding Fee on a Loan Assumption?

Yes. The VA funding fee for a loan assumption is currently 0.5% of the remaining loan balance, although some buyers may qualify for an exemption from the funding fee.

Does the seller have to let me assume their VA loan?

No. The VA mortgage is assumable, but the seller still decides whether to accept an offer structured around an assumption.

What happens to the seller's VA entitlement?

If an eligible veteran buyer with sufficient entitlement completes a Substitution of Entitlement, the seller's entitlement can be restored. Without a substitution, the seller's entitlement remains tied to the loan until it is paid off.

Are there homes with assumable 2% and 3% mortgages for sale around Portland and Vancouver?

Yes. I currently track more than 800 homes for sale throughout the greater Portland and Vancouver area with assumable FHA or VA mortgages, including hundreds with rates between 2.25% and 4%. 

About the Author

Brandon King is a Principal Broker and Team Leader with the Brandon King Real Estate Group at Keller Williams Realty Portland Central, helping residential and commercial clients throughout the Portland metro and Vancouver area. He is also a licensed Mortgage Loan Originator, giving him additional perspective on financing and how it can affect real estate decisions.

Brandon works with veterans and military families and has experience helping buyers understand VA financing, assumable VA loans, and how different financing strategies can affect their home search and monthly payment.

Brandon's approach is consultative, analytical, and education-focused. His goal is to help clients understand their options, evaluate the risks and trade-offs, and make well-informed real estate decisions.

This article is intended for general educational purposes. Loan qualification, assumption requirements, secondary financing, mortgage-servicer procedures, and individual circumstances vary. Buyers and sellers should confirm the requirements that apply to the specific loan and transaction.