You Can Still Get a 2.75% Mortgage in 2026. Here's the Catch.

Somewhere in Houston right now, a three-bedroom house is listed for sale with a mortgage attached to it: 2.75%, fixed, with 24 years left on the term. A search on Roam, a platform that identifies homes with transferable mortgages, turns up 433 properties in the Houston metro alone with rates at 3% or below. The same search on Zillow, which relies on sellers to self-report this feature, returns three.

That gap tells you everything about this market. Millions of below-market mortgages exist. Almost nobody knows they can be transferred.

The mechanism is called an assumable mortgage, and it works exactly the way it sounds: you take over someone else's existing home loan, including their interest rate, their remaining balance, and their repayment schedule. You don't apply for a new mortgage. You step into the seller's shoes and keep making their payments. The rate doesn't change. The term doesn't reset. On a $400,000 loan, the difference between an assumed rate of 3% and a new mortgage at 6.46% (the current 30-year fixed average per Freddie Mac as of April 2, 2026) works out to roughly $974 per month. Over the remaining life of the loan, interest savings can exceed $200,000.

It sounds like a cheat code for the housing market. But only about 6,400 assumptions were completed in all of 2023, according to Scotsman Guide, out of roughly 52 million active mortgages in the country. The National Bureau of Economic Research estimates that mortgage rate lock-in reduced household mobility by 16% and destroyed $20 billion in economic value in 2022 and 2023 alone. Assumable mortgages could theoretically help fix that. In practice, the barriers are steep enough that almost nobody uses them.

Only government-backed loans qualify (and that's about 23% of the market)

The first limitation is structural. Conventional mortgages, the kind backed by Fannie Mae and Freddie Mac, almost universally contain something called a due-on-sale clause. When the property changes hands, the full loan balance comes due immediately. No assumption. No transfer. No negotiation.

This wasn't always the case. Before the Garn-St. Germain Act of 1982, many states prohibited lenders from enforcing due-on-sale clauses, meaning buyers could assume virtually any mortgage. The Act preempted those state laws and gave lenders the right to demand full repayment on transfer for conventional loans, effectively killing conventional assumptions overnight. Government-backed loans (FHA, VA, USDA) kept their assumability through their own program rules, but that still wipes out roughly 77% of all active mortgages before you even start looking.

The assumable pool breaks down like this: about 12.2 million active government-backed loans, or 23% of the mortgage market. Of those, an estimated 6 million carry interest rates below 5%, according to AssumeList, one of several startups that have sprung up to help buyers find these properties.

Non-veterans can assume VA loans. This surprises most people. The catch for the seller is that their VA loan entitlement stays tied to that property until the assumed loan is paid off or refinanced, which can prevent them from using their VA benefit on a future home purchase. If the buyer happens to be a veteran with their own entitlement, they can substitute it, freeing up the seller's benefit. That detail alone determines whether many VA sellers are willing to play ball.

FHA loans are assumable by law for any creditworthy buyer, as long as the original loan was originated after December 15, 1989 (virtually all active FHA loans). USDA loans are also assumable, though they're geographically limited to rural areas and represent a tiny slice of the market.

How FHA, VA, and USDA assumptions compare

The three assumable loan types have meaningfully different rules. This table covers the differences that actually matter when you're evaluating a specific property.

	FHA	VA	USDA
Who can assume	Any creditworthy buyer	Any creditworthy buyer (non-veterans included)	Any creditworthy buyer
Minimum credit score	580-640 (varies by servicer)	620-660 (varies by servicer)	640+ (varies by servicer)
Occupancy requirement	Primary residence for at least 1 year	None (investment property allowed)	Primary residence only
Assumption fee	Up to $1,800 (doubled from $900 per recent HUD update)	0.5% of remaining balance + up to $300 processing	Varies by servicer
Mortgage insurance	Annual MIP for life of loan (post-July 2013, less than 10% down)	VA funding fee at assumption; no ongoing PMI	0.35% annual guarantee fee transfers
Processing mandate	45 days (HUD Handbook 4000.1)	45 days (VA Circular 26-23-27)	No specific federal mandate
Seller entitlement issue	None	Seller's VA entitlement stays tied to loan if buyer isn't a veteran	None

The VA column is worth studying. VA assumptions are the only type that allow investment property use, which is why VA assumptions surged over 700% between 2021 and 2023. If you're an investor who can stomach the equity gap, a 2.75% rate on a rental property is extraordinary. The trade-off is that the veteran seller may resist the deal because losing their entitlement is a real cost.

The FHA fee increase from $900 to $1,800 is recent and significant. Even at $1,800, assumption closing costs remain far below the $8,000 to $12,000 typical for a new mortgage origination. But the fee doubling signals that HUD recognizes assumption volume is rising and servicers need more compensation to handle it.

The equity gap problem is the real barrier

The assumable mortgage's biggest selling point (the low rate) creates its biggest obstacle (the money you need upfront).

When you assume a mortgage, you're taking over the remaining balance on the loan, not the purchase price of the home. If a seller bought a house for $350,000 in 2021 and has been paying down the mortgage for five years, their remaining balance might be $300,000. But the home is now worth $450,000. The difference between the sale price and the assumable loan balance is called the equity gap, and the buyer has to cover it.

In this example, that's $150,000 in cash (or a second mortgage) on top of the assumption. For context, the median down payment for first-time homebuyers in the U.S. is about 9% of the purchase price (per the National Association of Realtors' 2025 Profile), or roughly $40,000 on a $450,000 home. An equity gap of $150,000 isn't a down payment. It's a second house worth of cash.

Laurie Goodman, founder of the Housing Finance Policy Center at the Urban Institute, has been blunt about this: the equity gap makes assumptions impractical for most first-time buyers, who are "the last people that can come up with an extra $200,000 in cash." She and her team have argued that assumable mortgages would need significant policy changes to work at any meaningful scale.

The math gets worse the longer the seller has owned the home. Someone who bought in 2020 with an FHA loan has seen their equity grow through six years of payments plus significant home price appreciation. The gap between their remaining balance and the home's current value could easily exceed $200,000 in hot markets.

Second mortgages can close the gap, but watch the blended rate

The most common workaround is taking out a second mortgage: assume the seller's low-rate first mortgage and finance the equity gap with a separate loan at current market rates.

Run this math carefully. Say you're assuming a $300,000 first mortgage at 2.75% and need a $150,000 second mortgage at 8.5% (a typical rate for a second lien in 2026). Your blended rate across both loans works out to roughly 4.67%. That's still meaningfully better than the 6.46% you'd pay on a single new mortgage for the full purchase price, but it's not the 2.75% rate that caught your eye on the listing.

Several of the new assumable mortgage platforms, including Roam, have built calculators into their listings that show you the blended rate before you get emotionally attached to the headline number. This is the right way to evaluate the deal. If your blended rate lands at 5.5% or higher because the equity gap is enormous, the savings over a traditional mortgage shrink fast, and you're carrying the added complexity of two loan payments, two sets of terms, and two lenders who will both be deeply uninterested in talking to each other if anything goes wrong.

The sweet spot for assumptions is properties where the seller hasn't built up massive equity: newer purchases (2020-2022), lower-appreciation markets, or sellers willing to negotiate on price because the assumable mortgage gives them a competitive edge over other listings.

The process is slow, opaque, and frustrating by design

Even if the money works, the process will test your patience.

Unlike a traditional purchase where you shop around for lenders and pick the best offer, an assumption locks you into the seller's existing loan servicer. There is no lender shopping. You apply to that servicer, and only that servicer, for approval.

Both HUD and the VA mandate that servicers process assumptions within 45 days. The reality, according to multiple industry sources, is that it regularly takes 60 to 120 days. Craig O'Boyle, president of Assumption Solutions, has said publicly that actual timelines often stretch far beyond the mandate.

The reason is economic, not bureaucratic. Even after HUD doubled FHA assumption fees to $1,800, the actual cost to underwrite and close the transaction runs upward of $10,000 per loan, according to industry estimates cited by HousingWire. Servicers lose money on every assumption they process. They have zero financial incentive to staff up assumption departments, streamline the paperwork, or prioritize these transactions.

One borrower profiled by NPR in February 2026 was told by his servicer, Mr. Cooper, that 1,500 people were ahead of him in the assumption queue. He didn't hear anything for a month. When he hired a third-party assumption company (Assume Loans), he says his servicer contacted him within three days. Mr. Cooper disputed this, saying the timeline was consistent with industry norms. Either way, "1,500 people ahead of you" is not something anyone wants to hear when they've already signed a purchase agreement.

The startups trying to make this easier

The gap between "this is theoretically possible" and "this is something a normal person can actually do" has created a new category of real estate startups.

Roam is the most prominent. Backed by Opendoor co-founder Eric Wu, former Fannie Mae CEO Tim Mayopoulos, and Founders Fund's Keith Rabois, Roam operates in 23 states and lists homes with assumable mortgages featuring rates as low as 2%. They charge buyers a 1% fee at closing. Roam's seller protection plan covers the seller's mortgage payments if closing takes longer than 45 days, which removes one of the biggest objections sellers have about the process: the fear of making payments on a house they've already agreed to sell while the assumption crawls through underwriting.

The discovery problem is real. NPR reported that 98% of sellers don't even know their mortgage is assumable, according to Roam's founder Raunaq Singh. Most MLS listings don't flag assumability. Real estate agents rarely bring it up because the process is longer, more complicated, and pays them the same commission as a standard sale.

Assumable.io is the other major player, positioning itself as a nationwide marketplace with 13 years of assumption transaction experience. Assume Loans and Assumption Solutions focus on the concierge side, helping buyers and sellers work through the servicer process. These companies charge fees (typically 1% of the purchase price), and Mr. Cooper has publicly pushed back on the idea that hiring one actually speeds things up. The value proposition is contested, but the frustration that created these companies is not.

The policy debate that could change everything

FHFA Director Bill Pulte posted on X in November 2025 that the agency is "evaluating how to do assumable or portable mortgages, in a safe and sound manner" for conventional loans backed by Fannie Mae and Freddie Mac. He followed up days later, saying the FHFA is "actively evaluating portable mortgages."

If conventional mortgages become assumable, the eligible pool jumps from 12.2 million to nearly all 52 million active mortgages. The housing market implications would be enormous.

But the obstacles are equally enormous. Retroactively making existing conventional mortgages assumable could destabilize the mortgage-backed securities market, because investors priced those bonds assuming loans would be repaid when properties sold, not transferred at below-market rates. HousingWire published an analysis arguing this could cost MBS investors hundreds of billions. The more realistic path: making new conventional mortgages assumable going forward, priced into the securities from the start. That helps buyers in the next rate cycle but does nothing for people shopping today.

Portable mortgages, a separate concept where borrowers take their existing loan to a new property rather than transferring it to a buyer, are also under evaluation. These are standard in Canada, Australia, and the UK but have never existed at scale in the U.S.

Housing economists have been cautious. Realtor.com senior economist Joel Berner has noted that subsidizing demand without increasing supply might just push prices higher. The only guaranteed fix for the housing crisis, as every economist eventually admits, is building more homes.

When an assumption actually makes sense

Despite the complications, assumptions produce exceptional outcomes for the buyers who close them. HUD researcher Kevin A. Park, writing in the Cityscape journal, found that assumed loans default at a rate 20 to 40% lower than non-assumed loans, suggesting the extra qualification hurdles actually select for stronger borrowers.

The right profile for pursuing an assumption:

You have significant cash savings or equity from a prior home sale. The equity gap is the dealbreaker for most buyers. If you're selling an existing home and walking away with $150,000+ in proceeds, you're in a fundamentally different position than a first-time buyer scraping together 3.5% down.

You're targeting a property where the seller bought recently. A home purchased in 2021 or 2022 at a sub-3% rate with a high original LTV will have a smaller equity gap than a home purchased in 2018 and refinanced during COVID. Less equity built up means less cash you need at closing.

You plan to stay for at least 7 to 10 years. The savings from a low assumed rate compound over time. If you're going to move in three years, the upfront hassle and potential blended-rate complexity may not pencil out versus just paying 6.46% on a new 30-year fixed.

You're comfortable with a 60 to 120-day closing timeline. If you need to close in 30 days because you're relocating for a job, an assumption is almost certainly going to blow up your timeline. And possibly your blood pressure.

The blended rate (after second mortgage) still beats current market rates by at least 1.5 percentage points. Run the blended calculation before falling in love with the listing. If the gap only saves you 0.5% after accounting for the second lien, you're taking on significant process risk for marginal benefit.

What to watch for in 2026 and beyond

The assumable mortgage market is at an inflection point. Demand grew 139% between 2022 and 2023 (per the Bipartisan Policy Center), VA assumptions surged over 700% in the same period, and new platforms are making these properties far easier to find than they were even two years ago. In 2023, about 4,052 FHA assumptions and a growing number of VA and USDA assumptions were completed, totaling roughly 6,400 across all loan types (per Scotsman Guide and Mortgage Professional America). By 2024, both FHA and VA individually exceeded 5,000 assumptions each.

But the fundamental constraint remains: servicers lose money on every assumption, the equity gap locks out most first-time buyers, and only 23% of loans are eligible. The FHFA's exploration of conventional assumability is the biggest policy development in this space since the Garn-St. Germain Act of 1982 locked conventional loans behind due-on-sale clauses and left government-backed loans as the only game in town, but even optimists don't expect conventional assumptions to be available before 2027 or 2028.

For now, if you have the cash, the patience, and the willingness to work with a servicer that would rather you didn't exist, an assumable mortgage is one of the few genuinely good deals left in a housing market that hasn't had many of them since 2021.

We wrote about the state of the 2026 housing market earlier this year and called the current environment "not crashing, not recovering." Assumable mortgages are the rare bright spot in that stalemate: a real mechanism for saving real money, available to a narrow slice of buyers who meet the right conditions. The deal is real. The fine print is brutal. That's housing in 2026.

Frequently asked questions about assumable mortgages

Can I assume a conventional mortgage?

Almost never. Conventional loans backed by Fannie Mae and Freddie Mac include due-on-sale clauses requiring the full balance to be repaid at sale. The only narrow exception involves certain adjustable-rate mortgages, but this is rare. The FHFA is evaluating whether to make future conventional loans assumable, but no policy change has been implemented as of April 2026.

Do I need to be a veteran to assume a VA loan?

No. Any creditworthy buyer can assume a VA loan. The trade-off is that if you're not a veteran, the seller's VA loan entitlement remains tied to the assumed mortgage until it's paid off or refinanced. This means the seller can't use their VA benefit for another home purchase until then. If the buyer is a veteran, they can substitute their own entitlement.

How much does it cost to assume a mortgage?

Closing costs on an assumption are significantly lower than a new mortgage. FHA assumption fees were recently increased to $1,800 (up from $900) per a HUD policy update. The VA charges a funding fee of 0.5% of the remaining loan balance (about $1,250 on a $250,000 balance) plus up to $300 in processing fees. There is no origination fee or lender points because no new loan is being originated. If you use a third-party platform like Roam, expect an additional 1% buyer's fee at closing.

How long does the assumption process take?

Federal guidelines mandate 45 days, but real-world timelines typically run 60 to 120 days. The delay is largely because loan servicers are understaffed for assumption processing and lose money on each transaction. Working with a specialized assumption company or platform can sometimes accelerate the timeline, though servicers dispute this claim.

Will I inherit the seller's FHA mortgage insurance?

Yes. For FHA loans originated after July 3, 2013, with less than 10% down, annual mortgage insurance premiums (MIP) last for the life of the loan. You inherit this cost along with the favorable interest rate. The only way to eliminate it is to refinance into a conventional loan, which means giving up the assumed rate. Factor MIP into your total monthly cost calculation when evaluating whether the assumption math works.

Can I assume a mortgage on an investment property?

It depends on the loan type. VA loan assumptions do not require the property to be your primary residence, making them a viable option for investors. FHA assumptions require you to occupy the home as your primary residence for at least one year. USDA assumptions also require owner-occupancy.

How do I find homes with assumable mortgages?

Traditional platforms like Zillow rely on sellers to self-report assumability, which almost none do. Specialized platforms like Roam (23 states), Assumable.io (nationwide), and AssumeList cross-reference property data with government loan records to identify assumable mortgages automatically. You can also ask a real estate agent to filter MLS listings by FHA or VA loan type, though this isn't always a standard search field.