Assumption Loan – Update (pain)

So the Assumption Loan process continues- only about 30 days in at this point but was looking to get an update as everything has been radio silence for a couple of weeks – and what an update it was –

Basically the buyer is being told by my lender they won’t qualify for the assumption because they won’t meet the VA occupation requirements – currently the VA eligible husband (retired not on active duty) has to remain behind for 10 months to finish his current contract with his company – however, every person the buyer has spoken with at the VA states they they absolutely will meet the VA requirements for this VA assumption loan, including the occupancy requirements. Particularly the excerpt from the VA Lender’s Handook, Page 3-11, Topic 5, Paragraph b in which the spouse can take up primary occupancy if the primary beneficiary is staying to complete a work requirement- when this fact was point out to the bank it was then found out they hadn’t even submitted the buyers application to be reviewed by the VA –

Under the new VA circular even if the lender intends to disapprove a VA assumption loan, the packet must still be sent to the VA. I confirmed with the VA that nothing has been submitted to them reference this VA assumption loan and this makes it impossible to take advantage of the fact that you can appeal a disapproval decision by the lender –

All of it’s a bit more frustrating when you can clearly see under the VA rules and guidelines that the buyer has meet all requirements and the lender is choosing to be ignorant about them- the VA recommended to file an IG and askva.gov claim so that they could provide more direct assistance as they confirmed again that the buyers meet their occupation requirements under the current guidelines.

As the sellers we agreed to be patient and give the buyers the opportunity to work the process a bit particularly because they have included us on much of the information and I can clearly see where my lender is talking out their 4th point of contact. In thought much of the assumption vodo had been cleared up but turns out that’s not so much the case.

They have already committed to turning this into a conventional buy if needed but that’s a financial hit that I can’t see taking just because my mortgage company doesn’t understand the rules. These people have already sold their home and are living in a month to month rental so their desire to be aggressive about the process and calling and emailing the world has been a sight to see. The fight continues.