What Every Service Member Should Know About Assumable VA Loans Before Their Next PCS Move
- VA loans are assumable—civilians and military buyers can take over your low-rate VA loan, making your home more attractive when selling.
- If a civilian assumes your VA loan, your entitlement stays tied up until that loan is paid off or refinanced, limiting what you can use for your next home.
- You can still use your remaining VA entitlement to buy again, but you may need a down payment if the new home exceeds your remaining guaranteed amount.
- Down payment is only required on the amount above your VA-guaranteed limit, usually 25% of the difference between the home price and what’s backed.
- Full entitlement is restored only if the assumed loan is paid off, refinanced, or assumed by another VA-eligible buyer.
When it's time for military families to receive PCS (Permanent Change of Station) orders, the process of selling a home can feel daunting. For service members who used a VA loan to purchase their home, there's a valuable option that many overlook: allowing a buyer to assume your VA loan. Understanding how assumable loans work, especially under the VA program, can be the difference between a smooth transition and a stressful home sale.
In this blog post, we’ll break down what an assumable VA loan is, how it affects your VA loan entitlement, the financial implications when a civilian assumes your loan, and how to calculate your eligibility for your next home purchase.
What Is an Assumable VA Loan?
An assumable loan means that a new buyer can take over your existing mortgage—including your interest rate, loan balance, and terms. This is particularly attractive in today's market, where interest rates are higher than they were just a few years ago. If your VA loan has a low interest rate, it becomes a major selling point for potential buyers.
The VA loan is one of the few loan types that are assumable, but the assumption must be approved by the lender and/or the VA.
Who Can Assume a VA Loan?
Anyone can assume a VA loan—civilian or military—as long as they qualify under the lender’s requirements and the VA approves the assumption. However, there's an important catch for military homeowners:
If a non-military (non-VA-eligible) buyer assumes your VA loan, your VA entitlement tied to that loan remains attached until the loan is paid off or refinanced by the buyer.
This could impact your ability to use your VA benefits again without restrictions.
Understanding Your VA Loan Entitlement
The VA loan entitlement is the amount the VA guarantees on your behalf. There are two types:
1. Basic Entitlement:
$36,000
Covers loans up to $144,000 (since VA guarantees 25%)
2. Bonus (Second-Tier) Entitlement:
Kicks in for loans over $144,000
Based on the conforming loan limit in your county (e.g., $806,500 in Manatee County, FL for 2025)
Maximum total guarantee is 25% of that amount ($201,625 in this case)
Together, these allow most eligible service members to buy a home up to the county limit with zero down payment.
Real-Life Example: Selling a Home with a VA Loan
Let’s say you bought a home with a VA loan for $310,000.
The VA guaranteed 25% of that = $77,500
Now, you receive PCS orders and need to sell. A civilian buyer is interested and qualifies to assume your loan.
Good news: you can sell your home with a low-interest VA loan, potentially making it easier to attract buyers.
However, because the buyer is not VA-eligible:
That $77,500 of your entitlement remains tied up
It cannot be reused until the loan is repaid or refinanced
Buying Your Next Home: What You Need to Know
Let’s say you're now moving to Manatee County, FL, where the VA loan limit is $806,500. That gives you a maximum entitlement of:
$806,500 x 25% = $201,625
You already used $77,500, so your remaining entitlement is:
$201,625 - $77,500 = $124,125
This means you can buy another home using a VA loan up to:
$124,125 x 4 = $496,500
What if the new home costs more?
Let’s say the new home you want costs $595,000.
Amount over guaranteed limit: $595,000 - $496,500 = $98,500
VA requires 25% down on that difference: $98,500 x 25% = $24,625
So, you'd need a $24,625 down payment.
If instead, you had sold your previous home to a VA-eligible buyer (or the loan was paid off/refinanced), your full entitlement would be restored, and you could likely buy the $595,000 home with zero down.
Key Takeaways for Military Sellers
VA loans are assumable, and that can be a huge marketing advantage when selling.
If the buyer is not VA-eligible, your entitlement remains tied up.
You can still reuse remaining entitlement, but may need a down payment.
You can restore full entitlement if the existing loan is paid off or refinanced.
Final Thoughts
Assumable VA loans are a powerful tool for both selling your current home and making strategic decisions about your next one. As you prepare for your PCS, it’s worth speaking with a VA-savvy lender or real estate agent who understands how to maximize these benefits.
A little knowledge about entitlement, assumptions, and calculations can go a long way in ensuring a smooth move and a smart financial transition.
Got questions about how this applies to your unique situation? Reach out to a trusted VA lender or real estate professional who can walk you through the numbers and help you plan your next steps with confidence.
Your VA benefits are one of your most valuable tools—use them wisely!
