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FHA Loans ARE Assumable – More Important Now than Ever

We have addressed this numerous times but it is so important that we want to bring it up again: FHA Loans are assumable. We still get questions about this, and we get asked to “provide proof”, but rest assured FHA loans remain assumable. The only caveat is that they are only assumable by “qualified borrowers”; they used to be assumable by most anyone.

This is significant b/c FHA loans have a limit of $729,750, and FHA rates are extremely low right now. More importantly, when the economy recovers (and it will), inflation will likely surge and interest rates will shoot up.

If rates are in the 10% range, a home with an assumable 4.75% FHA loan will be far more valuable than a home with no assumable financing. A 5% lower rate on a $500,000 loan works out to over $25,000 per year in interest rate savings.

Finally, FHA loans are not to be “feared” in the way that so many asset managers and realtors do. FHA underwriting is more flexible than Fannie Mae’s in many ways, and FHA allows for “as is” transactions.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167