FHA Loan Assumption Process - How it works..

Real Estate Agent with Coldwell Banker Burnet - Associate Broker

My client who is selling their home has an FHA loan that is assumable.  How do we know if the new buyer can assume it?
The current note holder/mortgagee needs to contact the Assumption call center at 800-340-0570 to request an Assumption package, which is essentially the package they would provide to the potential new home buyer of their home.
The new buyer must meet current FHA guidelines (600 min.score/ 41 back ratio, standard income/credit/qualifying), owner occupied only. Property is not underwritten, only the new borrower.
No minimum down payment is required, but if the seller has equity that he is entitled, the new borrower must find that money to pay him/her from their own/outside sources. Fees? Credit report, flood, and assumption fee (usually about $500) Plus title fees, but no ALTA is required.  Purchaser may want to purchase an owner's policy. Turn time?  45-60 days (min. 3 weeks).  The worse the credit, and the more disorganized and non-responsive the new borrower is to requested additional information or incomplete application/package, the longer it takes to close.

Knowing the value of FHA and the assumability of the loan is one of the most unique and valuable elements of the program!


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Harry F. D'Elia
Real Estate and Beyond, LLC - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

Thanks for sharing your information with us today. Have a great weekend.

Aug 14, 2009 08:14 AM #1
Charles Perkins
Charles G. Perkins, CPA - Burien, WA

Great to know.  I rarely run across sellers with FHA loans unfortunately. 

Aug 14, 2009 08:18 AM #2
Brian Anderson
Peachtree SEO - Peachtree City, GA
SEO and Social Media Marketin

Pete - nice post on assumptions.  Made me reminiscence about the old No Qualifying assumptions!

Feb 05, 2010 03:44 PM #3
Robert Kleven

Hi Pete...

I have a property listed that is an ideal candidate for marketing as an FHA assumption. I'm just now sure how to structure it to cover commissions closing costs etc.

Oct 20, 2010 05:32 AM #4

I co own a home with soon to be x boyfriend. i just found out when attempting to retrieve tax info online that his is the primary borrower. i called the bank and they said i would have to assume the mortgage to have his name removed. I dont understand how that works i have read on it but how much will it cost me. I paid the closing costs, monthly mortgage and ins, as well as all the house hold bills. He has not paid any payments in the last 2 1/2 years. now i have to pay more money to have my name be the only one on the house.

i know i cant afford a attorney to help figure this out and wells fargo is not being forthcoming about  the details, they just state 11$application fee, 508.$fee to them and county filing fees. i called origianl lender and they said i would have to have re appriased and inspected etc.. well that is a different story i dont want to re buy my house from myslef and go thru that hassle..

Looking for the chepest method possible with an assumption (non-qualifying assumption)?? but what does that mean i have the pay the equitable difference? uggghh..

Jan 18, 2013 12:31 AM #5
E Langland

We are working with a potential "buyer" on our Assumable FHA loan with Wells Fargo. She is a very strong candidate so we are optimistic.
Have you actually seen this process take the 45-60 days? We have an offer on a new house and are wondering when we could hope to have an answer for us-the sellers, to move on.
I was told 30 days for approval only then an additional 60-90 days from then to actually close.
I can't find info anywhere where someone can attest to how long it takes.. outside some negative rants about WF in general.
Any info/experience anyone has with these is appreciated.

Mar 05, 2015 05:00 AM #6
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