Jacob McCrackin
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Freddie Mac’s survey put the average 30-year mortgage rate at 7.40% on October 15, 2026. Plenty of Colorado Springs homeowners who bought with a VA loan in 2020 or 2021 are paying under 3%. A VA loan can be assumed: the buyer takes over the seller’s loan, rate and remaining term included, instead of taking out a new one.
That gap in rates is worth hundreds of dollars a month to the right buyer. Getting it, though, means solving three problems that most listings never mention: the cash between the loan balance and the price, what happens to the seller’s entitlement, and how long the servicer takes to say yes.
Every VA loan closed since March 1, 1988 carries a line in its paperwork: “This loan is not assumable without the approval of the Department of Veterans Affairs or its authorized agent.” In practice the authorized agent is the company servicing the loan. It approves the assumption when three things are true: the loan is current, the buyer is contractually bound to buy the home and take on the loan, and the buyer passes the servicer’s credit review.
The buyer does not need to be a veteran. A civilian, a service member who has never used the benefit, or a veteran can all assume a VA loan. What changes with each of them is what happens to the seller, and we come back to that below.
The buyer gets the existing rate, the existing balance and whatever term is left. They do not get a new 30 years.
An assumption only replaces the part of the price that is still owed. Everything above the loan balance has to be paid to the seller at closing.
Here is an illustration. The rates are examples; a lender sets the real ones.
A buyer who can pay that $121,000 in cash keeps the $1,633 payment for the remaining 25 years. Most buyers cannot, which is where second loans come in.
Since August 2024, VA has said in writing that an assumer can take out a second loan to cover the gap (Circular 26-24-17). The rules: the second loan must sit behind the VA loan, it cannot put cash in the buyer’s pocket, its payment counts in the buyer’s debt-to-income ratio, and its rate can be higher than the VA loan’s. Say the buyer finances the $121,000 at 9.5% over 30 years. That adds about $1,018, for a total of roughly $2,651 a month.
Compare that with a new VA loan on the same $475,000 house at, say, 7%, with the 2.15% first-use funding fee rolled in: about $3,228 a month. The assumption still saves close to $580 a month, even with an expensive second loan.
Two catches. Few lenders write these second loans, so line one up before you make an offer. And if the second loan cannot itself be assumed, your own buyer may not be able to assume the VA loan when you sell, a risk VA tells servicers to warn you about.
When you bought with your VA loan, part of your entitlement was committed to it. On that $400,000 loan, VA’s guaranty is 25%, so $100,000 of entitlement.
If a civilian or any buyer who does not substitute their own entitlement assumes the loan, your $100,000 stays committed until the loan is paid off. On a loan with 25 years left, that could be most of your career and beyond.
Being released from liability does not fix this. Once the servicer approves the buyer, you can be released from personal liability for the loan, and you should insist on it. Your entitlement is a separate thing, and it stays tied up anyway.
There is one fix. VA restores your entitlement when “a qualified Veteran-transferee agrees to assume your loan and substitute their entitlement,” and the buyer has to substitute the same amount you used. So the buyer must be an eligible veteran or service member with at least $100,000 of available entitlement in this example, and the contract should make substitution of entitlement and your release of liability conditions of the sale.
If you accept a non-veteran assumption anyway, you still have the rest of your entitlement. In a county at the 2026 baseline limit of $832,750, which includes El Paso, it supports about $432,750 with nothing down. At a duty station where homes cost more, that may not be enough. We work through that calculation in our guide to VA bonus entitlement.
Federal regulation gives a servicer with automatic authority 45 days to decide after it receives a complete application package. That clock does not start until the servicer considers the package complete, and the deadline can be extended for documented delays outside the servicer’s control. If the buyer is turned down, the seller has 30 days to appeal to VA.
A financed purchase here usually closes 30 to 45 days after an accepted offer. An assumption needs more room than that. Ask your servicer for its assumption package before you list, so the buyer can submit a complete file in the first week, and set the closing date in the contract around the servicer’s timeline.
If you have a report date, count backwards from it. A seller leaving Fort Carson on a hard date may be better served by a conventional sale, or by listing earlier, than by an assumption that runs past their departure.
PPAR’s August figures put El Paso County at about four months of supply. Buyers can afford to be picky, and a 2.75% loan gives them a reason to pick your house.
What a buyer needs to see before they call:
Price the house on its comparable sales and leave the rate out of that number. Every dollar you add to the price lands on the buyer as cash or as a higher-rate second loan, which shrinks the very advantage you are advertising. The rate brings in the showings; the price still has to hold up.
Decide before you list whether you will only accept an assumption with substitution of entitlement. It narrows your buyer pool, and it protects your benefit. If you are about to buy again, that trade-off usually settles itself.
Assumable loans rarely announce themselves. A home bought with VA financing in 2020 or 2021 is the clue. Your agent can ask the listing agent for the rate, balance, remaining term and servicer before you spend time on a showing.
Budget for the VA funding fee on an assumption: 0.5% of the balance you take over, about $1,770 on the $354,000 in our example. Veterans receiving VA disability compensation are exempt. The servicer’s processing fee is capped by regulation at $300 plus the cost of the credit report.
An assumption is a negotiation with two parties on the other side: the seller and the servicer. Having a VA loan realtor in Colorado Springs who has handled the paperwork matters more here than on an ordinary VA purchase.
Yes. A civilian buyer can assume a VA loan if the loan is current and the servicer approves their credit. The trade-off falls on the seller: their entitlement stays committed to the loan until it is paid off, because only an eligible veteran can substitute their own entitlement.
The servicer has 45 days to approve or deny the buyer once it has a complete application package, and that deadline can be extended for delays outside its control. Gathering the package takes time too, so plan for a longer contract than the 30 to 45 days a financed purchase usually needs.
Yes, 0.5% of the loan balance being assumed, unless the buyer is a veteran receiving VA disability compensation. The servicer can also charge a processing fee of up to $300 plus the cost of the credit report.
If your loan carries a low rate and you are thinking about selling, find out if your loan is a listing advantage. We will price your house from recent closed sales and show a buyer’s gap and payment at that price, so you can decide whether to advertise the assumption before the listing goes live.
If you are ready to sell your Colorado Springs home, our seller page covers PCS timing and pricing. For the PCS side of a VA-financed sale, see our guide to selling a home with a VA loan.
Sources: VA Circular 26-24-17 (August 2024); 38 U.S.C. 3714; 38 CFR 36.4303 and 36.4313; VA.gov funding fee and entitlement restoration pages; Freddie Mac Primary Mortgage Market Survey, October 15, 2026; PPAR Monthly Sales Activity, corrected August 2026 report. Payment figures are illustrations. We are real estate agents, not lenders; confirm terms with the loan servicer. Last updated October 23, 2026.
Jacob McCrackin is a former Army Staff Sergeant whose first duty station was Fort Carson. As an associate broker with Solid Oak Realty, he works with service members and veterans across Colorado Springs on VA purchases, sales and assumptions.