Video — Can FHA-Approved Loans Be Assumed By A Future Buyer?

"Assumable" means "someone else can take over the loan when they buy your home." As this short video explains, FHA loans are usually assumable. If you have an FHA loan, particularly one with favorable terms, and it is assumable, you may have another tool in your selling negotiation.

The process of assuming a loan can be easier, and sometimes less expensive, than starting a completely new loan. This is good for the buyer! Assumption requires a credit check, but home appraisal and other processes and costs can be skipped.

Interest rates will affect the value of assumability. If interest rates have dropped since you originated the FHA loan, of course, there will be less interest in assuming it.

Know the interest rate and terms of your FHA-backed loan, and read the loan terms to see if it is assumable, before selling. It may help you sell.

And if you are in the process of buying with an FHA-backed loan, ask whether the loan is assumable. If interest rates rise, that assumable loan may become a valuable asset when you sell in the future.