How do I find assumable mortgages, and is that better than subject-to?
By Josh MillerUpdated 4 min readAn assumption is the lender-approved version of taking over a loan: you qualify, the servicer signs off, and the seller can be released, but FHA loans closed since December 15, 1989 require the new borrower to live in the house, so most investors can't use them. Subject-to skips the lender's approval, which is why it works for investors and why it carries the due-on-sale risk an assumption doesn't.
The 30-year mortgage rate averaged 7.40% the week of October 8, 2026. Meanwhile, about 12.1 million FHA, VA and USDA loans were outstanding in the second quarter of 2026, and by our arithmetic from the FHFA's mortgage data, about 5.1 million of them carry a rate under 4%.
Every one of those government loans is assumable under its program's rules. That sounds like the best deal in real estate, and for the right buyer it is. For an investor, mostly it isn't, and the reason is one sentence in HUD's handbook.
Assumption vs subject-to, side by side
| Assumption | Subject-to | |
|---|---|---|
| Lender approves it? | Yes, the servicer underwrites you | No, the lender isn't asked |
| Whose name is on the loan after? | Yours | Still the seller's |
| Seller released? | Can be, on FHA and VA | No |
| Due-on-sale risk | None, the lender agreed | Yes, the lender can call the loan |
| Investors allowed? | FHA: mostly no. VA: yes if approved. USDA: program buyers only | Yes, subject to the contract risk |
| Speed | Weeks; VA sets a 45-day decision deadline | As fast as the closing |
FHA: assumable, but you have to live there
HUD's handbook says plainly that "all FHA-insured Mortgages are assumable." Then it adds the rule that matters to investors: if the loan closed on or after December 15, 1989, the person assuming it must intend to live there as a principal residence or an approved second home. Investment-property assumptions are allowed only on older loans.
The assuming buyer is fully underwritten, like a new borrower. The servicer's processing fee is capped at $1,800, up from $900 by a HUD notice in May 2024. When it's done, the seller can be released from the loan.
VA: anyone can assume, but the seller pays a hidden price
Under 38 U.S.C. 3714, a creditworthy buyer can assume a VA loan, veteran or not, and the seller can be released from liability. The costs are capped: a processing fee of no more than $300, and a VA funding fee of 0.5% of the balance unless the buyer is exempt. Servicers with automatic authority must decide within 45 days of a complete application.
The catch is the seller's entitlement. VA's guidance says that unless the buyer is an eligible veteran who substitutes their own entitlement, the seller's entitlement "remains encumbered by the loan until the loan is paid in full." For a veteran who wants another VA loan someday, that's a big ask, and a good reason to explain it to them up front.
VA guidance from August 2024 says a second loan to cover the gap between the price and the loan balance is generally not prohibited, as long as it sits behind the VA loan.
USDA: program buyers only
A USDA loan can be assumed only with Rural Development's approval, by a buyer who meets the program's rules, including its income limits. The seller "must remain personally liable." For most investors, that closes the door.
Where assumable homes are listed
On the big portals, assumability is whatever the seller or agent writes in. When NPR searched Houston in February 2026 for listings with an assumable rate of 3% or less, it found 433 on Roam and 3 on Zillow. Search the listing remarks for "assumable," "assume," "FHA" and "VA," and expect to miss most of them.
The dedicated sites, as they describe themselves (company claims, checked October 14, 2026):
- Roam finds homes with assumable FHA and VA loans and walks the buyer through the servicer. It charges the buyer 1% of the price, and reported 17 states in April 2025.
- AssumeList is a searchable database of listed and unlisted homes with FHA, VA and USDA loans, showing the approximate balance, rate and payment.
- Assumable.io is a listing search you filter by rate, loan type and payment, for a flat monthly fee.
Listings that mention an assumable loan are still rare. In one Northeast Florida MLS, they peaked at about 1.2% of listings in the third quarter of 2025, by a local brokerage's count.
Why investors end up at subject-to
Put the rules together. FHA wants an owner-occupant. USDA wants a program buyer. VA will approve an investor but costs the seller their entitlement. So most investors who want a low-rate loan take title subject to it instead, without the lender's approval, and accept that the lender can call the loan. Here's exactly what the due-on-sale clause allows.
The other difference is who the seller is. A homeowner listing a house with an assumable FHA loan is usually fine, selling on their own schedule, with an agent. The owner who says yes to subject-to is usually behind on payments, and that owner doesn't show up on Roam. They show up in the county's foreclosure filings.
Find the owners who need out
Across the 99 counties where we could measure them, about 13 of every 100 owners with a foreclosure filing sold off-market within 12 months of the filing, against about 1.2 of every 100 houses picked at random. Those are the conversations where taking over the payments is a real answer. The free county read shows how many foreclosure filings your county records, and how they sold.
Questions investors ask
What is an assumable mortgage?
A loan that a buyer can take over, with the lender's approval, at the same rate, balance and term. FHA, VA and USDA loans are assumable under their program rules. Most conventional loans are not, because of the due-on-sale clause.
Can an investor assume an FHA loan?
Usually not. For FHA loans closed on or after December 15, 1989, the person assuming the loan must plan to live in the house as a principal residence or an approved second home, under HUD's handbook.
Can a non-veteran assume a VA loan?
Yes, if the servicer approves the buyer's credit. The catch is for the seller: unless an eligible veteran assumes the loan and substitutes their own entitlement, the seller's VA entitlement stays tied up until the loan is paid off.
How much does it cost to assume a mortgage?
For FHA, the servicer's processing fee is capped at $1,800, since May 2024. For VA, the processing fee is capped at $300, plus a funding fee of 0.5% of the balance unless the buyer is exempt. Title, recording and credit report costs are on top.
How long does a mortgage assumption take?
VA requires servicers with automatic authority to decide within 45 days of a complete application. FHA has no single published deadline. Expect weeks, not days, and much longer if the servicer is slow.