FHA loans are the most commonly assumed mortgage type in the United States. If you've found a home with an FHA loan at a rate well below today's market, here's exactly how to assume it.
Step 1: Find an FHA assumable listing
Not every home for sale has an assumable mortgage. You need to find one where the seller has an active FHA loan and is willing to allow assumption. Passage makes this easy — every listing shows the loan type, interest rate, remaining balance, and equity gap upfront.
Step 2: Evaluate the deal
Before making an offer, run the numbers:
- Equity gap: The difference between the home price and remaining loan balance. This is what you need in cash or a second loan.
- Monthly savings: Compare the assumed payment to what you'd pay on a new loan at current rates.
- Total interest saved: Over the remaining loan term, how much less will you pay in interest?
Use the equity calculator on any Passage listing to model different scenarios.
Step 3: Make an offer and go under contract
Work with the listing agent to submit your offer. The purchase contract should include language specifying that the sale is contingent on a successful loan assumption. Your real estate agent can help with this.
Step 4: Apply with the loan servicer
The loan servicer (the company that collects the seller's monthly payments) handles the assumption process — not the original lender. You'll need to submit:
- A completed assumption application (the servicer provides this)
- Proof of income (pay stubs, W-2s, or tax returns)
- Bank statements
- Government-issued ID
- Authorization for a credit check
The servicer evaluates your creditworthiness similar to a traditional mortgage application, but typically with fewer hoops. There is no minimum credit score mandated by HUD, but most servicers look for 580–620+.
Step 5: Pay the assumption fee
FHA assumptions carry a processing fee capped at $1,800 (per HUD guidelines). This is significantly less than typical closing costs on a new mortgage, which can run 2–5% of the loan amount.
Step 6: Close and transfer the loan
Once the servicer approves you, the loan transfers to your name. You'll close on the home just like a traditional purchase — signing documents, paying the equity gap, and receiving the keys.
The entire process typically takes 30–60 days from application to closing, though some servicers may take longer. Patience is key — servicers are still building out their assumption processing teams as demand increases.
Key things to know
- Anyone can assume an FHA loan — you don't need to be a first-time homebuyer or meet FHA's standard purchase requirements.
- The rate is locked in — it does not change during or after the assumption.
- Mortgage insurance (MIP) still applies — FHA loans carry annual MIP, which transfers with the loan.
- The seller is released from liability once the servicer approves you and the assumption is complete.
Common timeline
- Week 1–2: Find listing, make offer, sign contract
- Week 2–3: Submit assumption application to servicer
- Week 3–6: Servicer reviews and processes
- Week 6–8: Approval, final documents, closing
Ready to find an FHA assumable loan? Browse FHA listings on Passage.