One of the most frequently asked questions about having a VA guaranteed mortgage has to do with the ability to sell the property. Is the borrower on a VA mortgage restricted in any way from selling the home? For an outright sale of the property, the answer is no.

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April 23, 2014

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0.000 points
4.125% / 4.209% APR

15 YEAR FIXED

0.000 points
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Bruce Reichstein (NMLS #273132) is Sr. Loan Officer specializing in VA Home Loans with Emery Federal Credit Union - VALoans.com. Bruce has originated and underwritten VA loans in all 50 states for over 25 years and is a Nationwide Lender.

Selling a Home Purchased with a VA Loan

While it's true that VA loans differ from conventional loans in some ways, in others they are exactly the same. One of the most frequently asked questions about having a VA guaranteed mortgage has to do with the ability to sell the property. Is the borrower on a VA mortgage restricted in any way from selling the home?

For an outright sale of the property, the answer is no. And there are no restrictions on who you can sell to, either-vets can sell to non-veterans, active duty personnel can sell the home to civilians, etc.

But if you want to sell the home by having the buyer assume the VA loan, the rules change.

The basics: Any VA loan closed after March 1, 1988 and offered on the market later on as a loan assumption purchase requires the buyer-the person assuming the VA mortgage--to have their qualifications reviewed and approved by either the lender, OR the Department of Veterans Affairs.

In addition to the "approval rule", when the loan is successfully assumed on a VA loan closed after March 1, 1988, the veteran must contact the VA and request a release from liability on the assumed loan. Otherwise, the original borrower risks becoming liable to the government should the new owner of the home default on the assumed loan.

There is no approval process required for any VA loan originated prior to March 1 1988, and the seller is not required to contact the VA for a release of liability on the loan when the loan is older than 1 March 1988. Even so, Department of Veterans Affairs officials say when it comes to loan assumption procedures, it's a very good idea to contact the VA for a release of liability regardless of when the loan was originated.