Are FHA loans really assumable these days?
Assumable loans can be an excellent opportunity for home buyers as they offer buyers a chance to obtain a loan, often at an attractive interest rate without the red tape of credit checks, etc.
Many people have FHA (Federal Housing Administration) loans. that are fully assumable, but they may not know it. Over the years, the FHA has changed its assumption criteria. Here's a rundown:
- Loans obtained before December 1, 1986 are freely assumable.
- Loans obtained between December 1, 1986 and December 14, 1989 are assumable if the buyer qualifies. In addition, the seller remains liable for any loan default unless the lender signs a release.
- Loans settled after December 15, 1989 are fully assumable if the buyer qualifies and has a satisfactory credit check. The seller is not held liable for any loan default.