What is a loan assumption?

What is an assumable loan?A loan assumption is a transaction in which a person (the “assumptor”) obtains an ownership interest in real property from another person and accepts responsibility for the terms, payments and obligations of that other person’s mortgage loan. The assumptor is liable for the outstanding obligations (including any fees, advances, or other charges), and unless a release of liability is requested, the original borrower will remain liable as well.  To qualify for an assumption, you may need to go through an underwriting process, including a review of your credit report and credit score.

Are all loans assumable?

No, only certain loans are assumable. The loan investors determine whether it is assumable. If a loan is assumable, the investors also set the terms and conditions for an assumption.

Assumable and non-assumable loans

The following loans are NOT eligible for a loan assumption:

  • Loans not secured by real estate (mobile/manufactured home-only loans with no land)
  • Subordinate liens
  • Credit sales
  • Unsecured loans
  • Accounts in active bankruptcy

The following loans MAY be eligible for a loan assumption. Please note there may be other requirements before you can assume an eligible loan.

  • FHA loans
  • VA loans
  • Certain conventional mortgages (e.g., adjustable rate mortgages after the introductory rate has expired)

Loans may be eligible for an assumption under the following circumstances:

  • Death of borrower (by successor in interest)
  • Divorce
  • The person wishing to assume the loan is a relative of the current borrower (spouse, child(ren), parent(s), brother(s), or sister(s), grandparent(s), or grandchild(ren) of the borrower)

Things to know about assuming a loan

  • The person wishing to assume the loan may be required to reside at the property. This requirement is determined by the loan investor.
  • Release of liability not guaranteed. An assumption does not always result in a “Release of Liability” for the current borrower.
  • Homeowners insurance is required.

What is the loan assumption process like?

Like most financial matters, assuming a loan takes time and requires documentation. The average length of time to complete a loan assumption is 45-90 days. Completion times may vary, and be subject to change based upon underwriting criteria. Certain documents are required to process a loan assumption. These may vary, based on the type of loan and the circumstances.

You can start your application process by filling out this form.

If you have questions about your loan assumption application, contact ditech Customer Service at 1-800-643-0202.


Not all loans are assumable. Some VA and FHA loans are assumable, as well as some conventional loans.  Find out your loan’s assumption eligibility by reviewing your loan documents and Loan Estimate or Truth in Lending disclosure.
The requirements to assume a loan may vary, depending on the type of assumption requested.  Generally, the account must be current, and the person assuming the loan must live in the home.  If the current borrower seeks release from liability for the debt, the assuming borrower must qualify for credit based on current underwriting guidelines. Learn more about loan assumption requirements on our Assuming a Loan page.
When we receive a loan assumption inquiry, our Assumptions department reviews its eligibility. We mail a letter with the results. If it’s eligible, we request the necessary documents and process them. Upon approval, we send the new borrower a loan assumption package. The loan assumption process usually takes 45-90 days.  Completion times may vary, and be subject to change based on underwriting criteria. You can start your application process by filling out this form.
To assume a loan, the assumptor or new borrower typically must qualify for credit based on current underwriting guidelines. If the new borrower qualifies, the previous borrower qualifies for release from liability for the debt, in most cases. For VA loans requesting a release of liability from an ex-spouse when the veteran is retaining the property, please contact the VA Regional Loan Center.
We require a fully executed divorce decree or separation agreement. Either one must include a property settlement agreement with details about the proposed loan assumption.
A loan assumption is the only way to change the borrowers' names on a loan agreement.
Corporations, partnerships, or LLCs are not qualified to assume loans.
If the new borrower is the beneficiary of a living trust and resides in the home, he or she may qualify for a loan assumption.