Buying a home in Los Angeles with an assumable mortgage
Some homes come with a loan the buyer can take over, including the seller’s original interest rate. Instead of searching every listing, I focus on homes that already have an assumable FHA, VA, or USDA loan, so you tour fewer homes and every one you see could come with a lower rate. This approach is for buyers purchasing a home to live in as their primary residence.
- CA Real Estate Broker, DRE #01884303
- LAMERICA Real Estate
- Serving Los Angeles and Ventura County
What is an assumable mortgage?
An assumable mortgage is a home loan that a buyer can take over from the seller, keeping the seller’s interest rate, remaining balance, and remaining term. Most FHA, VA, and USDA loans are assumable with the loan servicer’s approval, while most conventional loans are not. Because many homeowners locked in low rates in past years, assuming their loan can give a buyer a lower rate than a new mortgage would. The buyer still has to qualify, and has to cover the difference between the purchase price and the loan balance, either in cash or with a second loan.
How an assumption works
You take over the loan
You keep the seller’s rate, balance, and remaining term. You don’t start a new 30-year loan at today’s rates.
You qualify with the servicer
The seller’s loan servicer reviews your credit and income, much like a new loan application, and must approve the assumption.
You cover the gap
The difference between the price and the loan balance is paid with cash, a second loan, or a combination of the two.
Plan for a longer timeline
Assumptions usually take longer to close than a standard purchase, since the servicer controls the approval process.
A simplified example
| Purchase price | $800,000 |
| Seller’s remaining FHA loan balance (assumed) | $500,000 |
| Gap to cover with cash and/or a second loan | $300,000 |
You’d keep the seller’s rate on the $500,000 you assume. The gap is covered by your down payment and, if needed, a second loan at current rates. For many buyers, the blended cost of both loans can still be lower than one new loan for the full amount. Figures are for illustration only.
Which loans can be assumed?
FHA loans
Assumable with the servicer’s approval. The buyer generally must plan to live in the home as a primary residence.
VA loans
Assumable with approval, and the buyer doesn’t have to be a veteran. If a non-veteran assumes the loan, the seller’s VA entitlement can stay tied to it until the loan is paid off, which sellers should understand before agreeing.
USDA loans
Assumable with approval, but the buyer and property must meet USDA eligibility rules, which limits how often these come up in Los Angeles.
Conventional loans
Most aren’t assumable. They typically include a clause requiring the loan to be paid off when the home is sold.
How I help you buy with an assumable loan
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Set your budget
We figure out how much cash you have for the gap and how a second loan could cover the rest.
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Search smarter
I focus on homes that already have assumable loans, so you tour fewer homes and skip the ones that don’t fit.
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Confirm before you tour
I ask listing agents up front whether the seller is open to an assumption, so you don’t fall for a home that isn’t available this way.
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Line up the gap financing
I work with a lending partner who offers second loans for assumable purchases, subject to their approval.
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Manage the timeline
We build the servicer’s approval time into the contract, so you and the seller know what to expect.
For primary residences only. My assumable home search is for buyers purchasing a home they’ll live in. If you’re buying an investment property, an Equity Review or my investing guide is a better place to start.
Start your assumable home search
Tell me where you want to live and what you’re working with. It takes about a minute, with no cost and no obligation.
Selling a home with an assumable loan?
If you have an FHA or VA loan with a low rate, it can be one of your home’s biggest selling points, and most listing agents never mention it. Marketed the right way, an assumable loan can attract buyers who can’t afford today’s rates on a new loan. I’ll help you understand whether your loan is assumable, what it means for you as a seller, including VA entitlement and releasing your liability for the loan, and how to highlight it in your listing.
Frequently asked questions
How do I find homes with assumable mortgages?
Assumable loans aren’t always advertised, so it takes a targeted search. I look for homes likely to have FHA, VA, or USDA loans, then confirm with the listing agent whether the seller is open to an assumption before you tour.
Can I use an assumable mortgage to buy an investment property?
Not through my assumable home search. It’s for buyers purchasing a home they’ll live in as their primary residence. FHA assumptions generally require the buyer to live in the home, and the second loans I help arrange to cover the gap are for primary residences too. If you’re investing, start with my investing guide or a free Equity Review.
Do I still have to qualify for an assumable loan?
Yes. The seller’s loan servicer reviews your credit, income, and debts, similar to a new loan application, and must approve the assumption.
How do I pay the difference between the price and the loan balance?
With cash, a second loan, or a combination. I work with a lending partner who offers second loans for assumable purchases, subject to their approval.
How long does an assumption take to close?
Usually longer than a standard purchase, because the seller’s servicer controls the approval process and timelines vary by servicer. We plan for that in the contract from the start.
What should sellers know about letting a buyer assume their loan?
Sellers should make sure they’re formally released from liability for the loan once it’s assumed. VA borrowers should also know that if a non-veteran assumes the loan, their VA entitlement may stay tied to it until it’s paid off.
This page is general information, not lending or legal advice. I’m a real estate broker, not a lender. Loan assumptions and second loans are subject to approval by the loan servicer and lender, and terms vary.
Ready to search for an assumable home?
Tell me your budget and where you want to live, and I’ll show you how an assumable loan could fit.
323.929.7653