Lead
Buyers in 2026 can sometimes take over a seller’s low, pandemic-era mortgage rate through an “assumable mortgage,” letting them inherit sub-3% financing in some cases. Around 6 million U.S. homes are estimated to have an assumable mortgage with an interest rate below 5%, offering a potential shortcut to affordability. The transfer can benefit sellers (more buyer interest and possible higher offers) and buyers (much lower monthly payments), but it often involves lengthy servicer approvals and large cash gaps to cover higher current prices. These practical obstacles mean assumables are powerful for some households but remain limited as a broad-market solution.
Key Takeaways
- Estimated supply: Assume List estimates about 6 million U.S. homes have an assumable mortgage and a rate below 5%.
- Loan types: Government-backed loans (VA and FHA) are commonly assumable; roughly 18% of new mortgages in 2020 were VA or FHA originations.
- Servicer review: By law servicers have 45 days to assess an assumption, but real-world processing often takes months.
- Permitted fees: FHA rules allow servicers to charge up to $1,800 for an assumption, though other costs and third-party fees can add up.
- Home-price gap: U.S. house prices rose ~54% since January 2020, creating large cash shortfalls buyers must cover when assuming older loans.
- Down-payment burden: The price gap often requires six-figure cash down payments or hard-to-secure secondary financing.
- Market effect: Assumable loans can nudge stalled homeowners to list and potentially ease supply constraints, but their reach is limited by upfront cash needs.
Background
An assumable mortgage allows a buyer to step into an existing loan on the seller’s home, keeping the original interest rate and many loan terms. Conventional mortgages typically include due-on-sale clauses that prevent assumptions, but many government-backed products—most notably Department of Veterans Affairs (VA) loans and Federal Housing Administration (FHA) loans—permit transfer under specified conditions. During the pandemic, many buyers locked in exceptionally low long-term rates, producing a cohort of homeowners with below-3% financing.
As mortgage rates rose after the pandemic window closed, those low-rate loans turned into a competitive asset: sellers can advertise an assumable low-rate loan as a selling point, and buyers who missed the low-rate period can regain access to bargain financing. In response, specialized firms and search services—some using AI to identify candidate listings—have emerged to connect buyers and sellers and to help navigate the paperwork.
Main Event
Online searches illustrate both opportunity and opacity. One platform reported 433 Houston-area listings with an assumable mortgage at 3% or lower, while a more widely used marketplace listed just three—largely because the latter depends on seller self-reporting. That mismatch shows how many eligible assumables go unnoticed by mainstream listing tools.
Even when a loan is assumable, the transfer often stalls on administrative and financial hurdles. Servicers have a 45-day statutory window to vet an assuming buyer’s credit and underwriting, but industry practitioners say the process frequently extends to several months. Some buyers report dramatic speedups when third-party specialists press servicers; servicers in turn say applicants generally receive standard handling and caution against paying third-party fees for work borrowers can do themselves.
Another limiting factor is price inflation. With national home prices about 54% higher than in January 2020, the outstanding balance on a seller’s older loan is often far below current asking prices. Buyers must bridge that gap—sometimes hundreds of thousands of dollars—either with cash, a secondary loan, or creative financing. Secondary financing can be scarce or costly, so many buyers rely on sizable cash down payments to complete assumptions.
Analysis & Implications
Assumable mortgages function as a targeted affordability tool: they can dramatically lower monthly payments for a buyer who can manage the upfront cash and the time it takes to get through servicer review. For sellers with valuable low-rate loans, offering an assumption can sharpen their listing and increase buyer interest, potentially lifting sale prices in competitive markets.
However, the structural incentives of mortgage servicers and originators work against widespread assumption. Lenders and secondary-market actors earn more by closing new loans at today’s higher rates than by approving a transfer of a low-rate legacy loan. That misalignment can slow or complicate the process unless regulators or market actors change incentives or streamline procedures.
Policy proposals are emerging. Advocates argue that allowing more conventional loans to be assumable or enabling “portable” mortgages that move with the borrower could unlock reluctant sellers and modestly increase turnover. Critics counter that the down-payment hurdle means assumables primarily benefit buyers who already have significant wealth, limiting their usefulness for first-time buyers and starter-home mobility.
Comparison & Data
| Metric | Reported Figure |
|---|---|
| Homes with assumable mortgage <5% | ~6,000,000 (Assume List estimate) |
| Share of 2020 new mortgages that were VA or FHA | 18% |
| Servicer legal review window | 45 days (statutory) |
| FHA maximum assumption fee | $1,800 |
| Home-price change since Jan 2020 | +54% |
The table highlights why assumables are simultaneously promising and constrained: a large pool of eligible loans exists, but statutory windows, allowable fees, and massive home-price appreciation combine to limit how many buyers can realistically use them. Practitioners point out that regional patterns (price growth, local inventory, veteran homeownership rates) will shape where assumables are most practical.
Reactions & Quotes
Industry founders and buyers emphasize missed awareness and strong demand when assumptions are feasible.
“People just weren’t aware there was an opportunity for them to save literally tens, sometimes hundreds of thousands of dollars.”
Jerry Devlin, founder, Assume Loans
Devlin framed assumables as an underused savings mechanism; companies like his work to surface listings and shepherd buyers through servicer processes.
“Oftentimes, the first time that a seller hears that they have an assumable mortgage is from a buyer with Roam.”
Raunaq Singh, CEO, Roam
Singh highlighted platform-driven discovery gaps: popular listing services may miss assumables unless sellers report them, so specialized search tools can reveal otherwise hidden opportunities.
“If a lender can get rid of a 2.5% rate and lend money out at 6.5%, I think they’d prefer to do that.”
Craig O’Boyle, president, Assumption Solutions
O’Boyle summarized why servicers may be slow or unmotivated: originating new, higher-rate loans is more profitable than processing assumptions.
Unconfirmed
- Platform counts: Discrepancies between platforms’ listings (e.g., hundreds on one site vs. a few on another) reflect differing discovery methods and require independent verification for specific markets.
- Servicer speed claims: Reports that third-party specialists can consistently move an applicant to the front of the queue are anecdotal and vary by servicer and case.
- Policy shifts: Statements that Fannie Mae and Freddie Mac are “looking at” assumable or portable mortgages suggest exploration but do not equate to finalized programs or timelines.
Bottom Line
Assumable mortgages reopen a path to pandemic-era low rates for some buyers, offering potentially large monthly savings and a way to unlock sellers who cling to cheap legacy loans. The opportunity is real: an estimated 6 million homes could be relevant, and entrepreneurial services have already helped dozens of assumptions close.
But the approach is niche. Lengthy servicer processing, lender incentives favoring new loans, and steep cash gaps driven by 54% price growth since January 2020 mean assumables are most viable for buyers with liquidity, patience, or access to secondary financing. Policymakers and market participants exploring portability or broader assumability would need to address these financial and operational frictions to make the tool meaningful at scale.
Sources
- NPR (news report summarizing interviews and market data)
- Groundwork Collaborative (think tank analysis on housing policy)
- Urban Institute (policy research organization; expert commentary)
- U.S. Department of Veterans Affairs (official VA home loan program information)
- U.S. Department of Housing and Urban Development (FHA) (official FHA program guidance)