VA Loan Assumptions in 2026: Secondary Borrowing, Fees, and Forms

VA loan assumptions are an increasingly popular option for veterans and their families looking to transfer home ownership without the need for a new loan. However, understanding the nuances of VA loan assumption fees and forms in 2026 is crucial for mortgage brokers to navigate these transactions efficiently. This guide synthesizes the latest VA circulars to provide clarity on secondary borrowing, fees, and required forms.

What are the fees associated with VA loan assumptions in 2026?

Understanding the fee structure for VA loan assumptions is essential. According to VA Loan Guaranty Circular 26-23-10, the holder or servicer may charge an assumption processing fee. This fee is capped at $300 for those with automatic authority and $250 for those requiring VA prior approval. The fee covers underwriting, processing, and closing costs. If the loan is disapproved, $50 of the fee must be refunded if the disapproval stands after 60 days.

In addition to the processing fee, other charges may apply:

• VA funding fee: This is applicable unless the assumer is exempt or the transaction results from an unrestricted transfer.
• Credit report fees.
• Recording fees and taxes related to the recordation.
• Applicable taxes, hazard insurance, and assessments.
• Title examination and insurance fees.
• Local variance fees: As outlined in VA Circular 26-24-5, additional fees based on the property's location may be charged.

How does secondary borrowing affect VA loan assumptions?

Secondary borrowing can complicate VA loan assumptions, but it is not prohibited. According to VA Circular 26-24-17, if an assumer needs additional financing through a secondary lien, it must be subordinate to the VA-guaranteed loan to maintain its priority. The holder processing the assumption must ensure compliance with all statutory and regulatory requirements to protect the VA loan's first lien position.

What forms are required for VA loan assumptions in 2026?

Processing a VA loan assumption requires a comprehensive set of forms. VA Circular 26-23-10 Exhibit A provides a detailed stacking order for necessary documents:

1. Servicer or holder cover letter with contact details.
2. VA Funding Fee Receipt.
3. VA Form 26-8937, Verification of VA Benefits, if applicable.
4. VA Form 26-8106 and VA Form 26-1880 for assumptions with a substitution of entitlement.
5. Evidence of current loan status at the time of transfer.
6. Quit Claim Deed or similar document indicating ownership transfer.
7. Original Note and riders.
8. Agreement creating liability to the holder and VA.
9. Assignment of Escrow.
10. Purchase/Assumption Contract or relevant legal documents like a divorce decree.
11. Uniform Residential Loan Application (URLA).
12. Closing Disclosure Statement or ALTA statement for investment transactions.
13. Loan Estimate.
14. VA Form 26-8497, Request for Verification of Employment, and other income verification documents.
15. Credit Alert Verification Report System (CAIVRS) checks for the assumer and co-assumers.
16. Credit reports and related documentation.

Additionally, VA Circular 26-24-9 introduces VA Form 26-10291, Assumption Entitlement Acknowledgement. This form is designed to inform veterans about how an assumption affects their entitlement and must be signed by the selling veteran before closing.

What practical steps can brokers take today?

Brokers should familiarize themselves with the latest VA circulars and ensure they have the correct forms and fee structures in place. Here are some actionable steps:

• Review the latest VA circulars: Stay updated on any changes in assumption fees and forms.
• Educate clients: Ensure veterans understand the implications of assumptions on their entitlements.
• Verify document completeness: Use the stacking order from Exhibit A to ensure all required documents are collected.
• Manage secondary borrowing carefully: Ensure any secondary liens are subordinate to the VA loan to maintain its priority.
• Utilize local variance options: Be aware of geographical fee variances and apply them where applicable.

By staying informed and organized, brokers can streamline the VA loan assumption process, ensuring a smooth transaction for all parties involved.

For more on agency mortgage guidelines, see the Agency Guidelines hub.

This article is for informational purposes only and is not professional advice. Always verify against current guidelines before making decisions.