Assumable Mortgage 2026: How to Assume a 3% Rate & Save $500+/Month
Assumable mortgages are EXPLODING in 2026—and for good reason. Instead of getting a new mortgage at 6.25% (current rate), you can assume the seller's existing 3-4% mortgage and save $500-800/month. With millions of homeowners locked into low pandemic-era rates, assumable mortgages offer a rare opportunity to bypass today's higher rates. Only FHA, VA, and USDA loans are assumable (conventional loans are NOT). This complete 2026 guide covers how to find assumable homes, qualification requirements, the assumption process, and exact savings calculations. Compare with refinance options and FHA loan requirements. Find assumable mortgage homes now.
🔥 Assumable Mortgage Quick Facts (2026)
- ✓Savings: $500-800/month vs new 6.25% mortgage
- ✓Assumable Loans: FHA, VA, USDA only (NOT conventional)
- ✓Opportunity: 8M+ homeowners have 3-4% rates (2020-2021 buyers)
- ✓Requirements: Qualify like new mortgage (credit, income, DTI)
- ✓Down Payment: Must cover equity gap (often 20-40% down)
- ✓Timeline: 45-60 days (slower than new mortgage)
💰 Real Savings Example
❌ New Mortgage at 6.25%:
$300K loan = $1,847/month
✅ Assume 3.50% Mortgage:
$300K loan = $1,347/month
What Is an Assumable Mortgage?
Assumable mortgage = buyer takes over seller's existing mortgage (same rate, same terms, same lender). Instead of getting a new loan at today's 6.25% rate, you "assume" the seller's 3-4% mortgage and keep their low rate.
How It Works:
- 1. Seller has assumable loan: FHA, VA, or USDA mortgage at 3-4% rate
- 2. Buyer assumes loan: Takes over seller's mortgage (same rate, same balance)
- 3. Buyer pays equity gap: Down payment = home price - loan balance
- 4. Lender approves buyer: Must qualify (credit, income, DTI check)
- 5. Assumption closes: Buyer gets home + low rate, seller released from loan
Example:
- • Home price: $400K
- • Seller's mortgage balance: $300K at 3.50%
- • Buyer assumes: $300K loan at 3.50% (saves vs 6.25% new loan)
- • Buyer's down payment: $100K ($400K - $300K equity gap)
- • Result: Buyer saves $500/month vs new mortgage!
🏠 Find Assumable Mortgage Homes!
Search for homes with assumable FHA, VA, USDA mortgages. Save $500-800/month!
Search Assumable Homes →Free search • See assumable rates • Save thousands
Which Mortgages Are Assumable?
| Loan Type | Assumable? | Notes |
|---|---|---|
| FHA Loans | ✅ YES | All FHA loans assumable (most common) |
| VA Loans | ✅ YES | Buyer doesn't need to be veteran |
| USDA Loans | ✅ YES | Must meet USDA income/location rules |
| Conventional Loans | ❌ NO | NOT assumable (due-on-sale clause) |
| Jumbo Loans | ❌ NO | NOT assumable |
⚠️ Important: Conventional Loans NOT Assumable
70% of mortgages are conventional (Fannie Mae/Freddie Mac) and they have a "due-on-sale clause" that requires full payoff when home sells. You CANNOT assume conventional loans.
Only FHA, VA, USDA loans are assumable (about 30% of mortgages). Check loan type before making offer!
Assumable Mortgage Requirements (2026)
You Must Qualify Like a New Mortgage
1. ✅ Credit Score Requirements
- • FHA assumption: 580+ credit (same as new FHA loan)
- • VA assumption: 620+ credit (lender requirement)
- • USDA assumption: 640+ credit (USDA requirement)
2. ✅ Income & DTI Verification
Must prove income and debt-to-income ratio:
- • Provide 2 years tax returns, pay stubs, W-2s
- • DTI must be 43-50% or lower (same as new loan)
- • Lender verifies employment and income
3. ✅ Down Payment (Equity Gap)
Must pay difference between home price and loan balance:
Example: $400K home, $300K loan balance = $100K down payment (25%)
Typical down payment: 20-40% (depends on how much seller paid down)
4. ✅ Lender Approval
Seller's lender must approve assumption: Full underwriting process (credit check, income verification, appraisal). NOT automatic—lender can deny if you don't qualify.
5. ✅ Assumption Fee
Pay assumption fee at closing: $500-$1,000 (much cheaper than new loan closing costs of $3K-$6K).
How to Find Assumable Mortgage Homes
Search Assumable Mortgage Websites
Specialized websites list assumable mortgage homes:
- • Roam.com: Largest assumable mortgage marketplace (50 states)
- • Assumable.io: FHA & VA assumable listings
- • Zillow/Realtor.com: Filter by "assumable mortgage" (limited listings)
Ask Listing Agents
When viewing homes, ask: "Is this mortgage assumable? What's the loan type and rate?"
Many sellers don't advertise assumable mortgages—you have to ask! If it's FHA/VA/USDA, it's assumable.
Target 2020-2021 Buyers
Homes purchased in 2020-2021 likely have 2.5-3.5% rates (pandemic-era lows). Check public records for purchase date.
Strategy: Search for homes purchased 3-5 years ago (highest chance of low rate).
Assumable Mortgage Process (Step-by-Step)
Step 1: Find Assumable Home (Week 1)
- • Search assumable mortgage websites or ask listing agents
- • Verify loan type (FHA/VA/USDA), rate, and balance
- • Calculate equity gap (home price - loan balance = your down payment)
Step 2: Make Offer with Assumption Contingency (Week 1-2)
- • Include assumption contingency in offer (lender must approve)
- • Negotiate who pays assumption fee ($500-$1,000)
- • Get seller's loan details (lender, loan number, rate, balance)
Step 3: Apply for Assumption (Week 2-3)
- • Contact seller's lender to start assumption application
- • Submit credit, income, asset docs (like new mortgage)
- • Pay assumption processing fee ($500-$1,000)
Step 4: Underwriting & Approval (Week 4-6)
- • Lender orders appraisal (must support home price)
- • Underwriter reviews credit, income, DTI
- • Lender issues assumption approval (or denial)
Step 5: Closing (Week 7-8)
- • Sign assumption documents + standard closing docs
- • Pay down payment (equity gap) + assumption fee
- • Seller released from loan, buyer assumes mortgage
- • Result: You get home + low rate!
⏱️ Timeline: 45-60 Days
Assumptions take longer than new mortgages (30-45 days) because seller's lender must approve. Plan for 2 months.
Real Savings Scenarios
Scenario 1: Assume 3.50% FHA Loan
❌ New 6.25% Mortgage:
✅ Assume 3.50% FHA:
Frequently Asked Questions
Can I assume a conventional mortgage?
No—conventional loans are NOT assumable. Fannie Mae and Freddie Mac loans have a "due-on-sale clause" that requires full payoff when home sells. Only FHA, VA, and USDA loans are assumable. This is why assumable mortgages are rare (only 30% of mortgages are FHA/VA/USDA). Check loan type before making offer—ask seller or listing agent for loan documents.
Do I need to be a veteran to assume a VA loan?
No—anyone can assume a VA loan (don't need to be veteran or active military). However, if you're NOT a veteran, the seller won't get their VA entitlement back until you pay off the loan. Best scenario: Veteran assumes VA loan from another veteran (both keep entitlement). Alternative: Non-veteran assumes VA loan, but seller loses entitlement until loan paid off.
What if I can't afford the equity gap down payment?
Get a second mortgage to cover equity gap. Example: $400K home, $300K assumable loan, $100K equity gap → Get $80K second mortgage (HELOC or home equity loan) + $20K cash down. Result: $300K at 3.50% (assumed) + $80K at 8.00% (second mortgage) = blended rate 4.36% (still better than 6.25% new loan!). Caution: Two monthly payments (assumed mortgage + second mortgage). Learn about second mortgages.
How long does mortgage assumption take?
45-60 days average (slower than new mortgage's 30-45 days). Timeline: Week 1-2: Find home, make offer with assumption contingency, Week 2-3: Apply for assumption with seller's lender, Week 4-6: Underwriting and approval, Week 7-8: Closing. Delays: Seller's lender may be slow (not their priority), appraisal issues, missing documents. Tip: Work with experienced assumption processor to speed up process.
🚀 Start Searching Assumable Homes!
Find homes with assumable 3-4% mortgages. Save $500-800/month vs new 6.25% loan!
Search Assumable Homes →Free search • See assumable rates • Save thousands monthly
Related Mortgage Guides
FHA Loan Requirements 2026
FHA loans are assumable: 3.5% down, 580 credit, complete guide
VA Loan Benefits 2026
VA loans are assumable: 0% down, no PMI, veteran benefits
Mortgage Refinance Below 6% 2026
Alternative to assumption: refinance at 6.09%, save $50K-$100K
Home Equity Loan vs HELOC 2026
Use second mortgage to cover equity gap on assumption
Down Payment Assistance 2026
4,200+ DPA programs: help with equity gap down payment
Reduce Closing Costs 2026
Assumption fee only $500-$1K vs $3K-$6K new loan costs