While everyone else is stuck at 7%, some buyers are legally taking over FHA and VA loans locked in at 2.75–3.5% from 2020–2022. Here's exactly how assumption works in New York — and how to find these deals.
An assumable mortgage allows a buyer to take over the seller's existing home loan — including its original interest rate, remaining balance, and terms. You don't get a new mortgage at today's rates. You step into the seller's shoes and continue paying their loan.
This was unremarkable when rates were uniform. But between 2020 and 2022, the Federal Reserve pushed mortgage rates to historic lows — some NYC homeowners locked in FHA and VA loans at 2.5–3.5%. Today's rate is 7%+. The person who can take over one of those locked-in loans has a massive financial advantage over every conventional buyer in the market.
NYC has tens of thousands of FHA and VA loans originated between 2019–2022 at historically low rates. As those owners sell, any buyer with a qualifying assumption can step in and essentially time-travel back to 2021 mortgage rates. SellerFinanceNYC tracks these properties across all five boroughs.
Not every mortgage is assumable. Federal law governs which loan types allow assumption:
All FHA loans originated after December 1, 1986 are assumable by federal law. The buyer must qualify with the FHA lender (creditworthiness check), but there's no option for the lender to refuse the assumption if the buyer qualifies. FHA loans are common in Brooklyn, the Bronx, and Queens — especially for 1–4 unit buildings.
VA loans are assumable by both veterans and non-veterans. However, if a non-veteran assumes a VA loan, the seller's VA entitlement remains tied up until the loan is paid off — which affects the seller's future VA borrowing ability. For this reason, many VA sellers prefer buyers who are themselves veterans who can substitute their own entitlement.
Most conventional loans (Fannie Mae, Freddie Mac) contain a due-on-sale clause that requires full repayment when the property is sold. There are rare exceptions for inherited properties and transfers between family members, but in practice, conventional loans cannot be assumed by a third-party buyer.
| Scenario | Rate | Monthly Payment | Total Interest (27yr) |
|---|---|---|---|
| Assume FHA Loan | 3.125% | $2,982/mo | $346,000 |
| New Conventional Loan | 7.1% | $5,078/mo | $1,021,000 |
| Monthly Savings | $2,096/mo | $675,000 saved |
That's not a typo — over the remaining loan term, the assumption saves $675,000 in interest compared to a new conventional loan. Even after paying a premium to the seller for their equity, the math overwhelmingly favors assumption.
Assuming an FHA or VA loan in NYC takes 45–90 days, slightly longer than a conventional purchase. Here's why and what to expect:
Ask the seller for their loan servicer information and confirm the loan type. Check ACRIS — if the mortgage was originated 2019–2022 with an FHA or VA lender, it's almost certainly assumable. SellerFinanceNYC filters specifically for assumable listings.
Contact the seller's loan servicer (the company that collects payments — often different from the original lender). You'll complete a formal assumption application including credit check, income verification, and debt-to-income ratio review. The servicer must approve you as the new borrower.
The seller's equity (purchase price minus loan balance) must be covered in cash or via a second mortgage. In our example above: $875K price - $621K loan = $254K equity you must pay the seller. This is often the biggest hurdle — see the next section for solutions.
New York requires attorneys at closing. Your attorney reviews the assumption agreement, confirms the seller is being released from liability (critical — without a release, the seller remains on the hook if you default), and ensures proper recording.
The deed transfers, the assumption agreement is executed, and the servicer updates the loan record to your name. The original mortgage stays on the property through ACRIS — it simply now lists you as the obligor. Servicer assumption fees typically run $500–$1,000.
FHA assumption approvals can take 45–90 days because loan servicers have limited staffing for assumptions (they're rare). Build this into your contract timeline — a 30-day assumption is unrealistic. Ask for a 90-day closing window when negotiating with the seller.
The #1 challenge with assumable mortgages is the equity gap — the difference between the purchase price and the loan balance you're assuming. You must pay this to the seller in cash or through alternative financing.
The seller carries a second mortgage for all or part of their equity. You assume the first (low-rate FHA/VA) and make payments to the seller for the second. This is the most common creative structure — combining assumption with seller financing for the equity portion.
If you own other property in NYC, a HELOC or bridge loan against that property can fund the equity gap. You'll pay market rates on this portion, but the blended rate (3% first + 8% second) still often beats a full new loan at 7%.
Many sellers will accept a lower purchase price if assumption means a faster, cleaner transaction. A seller who might get $875K from a conventional buyer in 60 days might accept $820K for a buyer who can assume at 3.125% and close in 45 days.
Assume the FHA first mortgage at 3.125%, have the seller carry a second mortgage at 6.5% for their equity. Your blended rate on a 70/30 split works out to roughly 4.1% — still dramatically below today's market rate.
Qualifying for an assumption is similar to qualifying for a new mortgage, but with some key differences:
| Qualification Factor | FHA Assumption | VA Assumption |
|---|---|---|
| Minimum Credit Score | 580+ (some servicers 620+) | 580+ (varies by servicer) |
| DTI Ratio | 43–50% max | 41% preferred |
| Income Verification | Required (W-2, self-employed OK) | Required |
| Veteran Status Required? | No — anyone can qualify | No, but affects seller's entitlement |
| FHA MIP (Mortgage Insurance) | Continues at original rate | No PMI on VA |
| Appraisal Required? | Sometimes, servicer dependent | Sometimes |
Assumable deals are invisible on Zillow and StreetEasy — sellers rarely advertise this feature because most agents don't even know to ask. Here's how to surface them:
Filter by "Assumable" on the Live Map to see properties where sellers are actively offering assumption. Each listing shows the existing rate, remaining balance, and lender information so you can pre-calculate the equity gap before reaching out.
Search ACRIS for properties where the mortgage type is "FHA" or "VA" and was originated between 2019–2022. Properties with FHA case numbers in the mortgage document are federally assumable. This is time-consuming but free — SellerFinanceNYC automates this across all 900K+ NYC lots.
When looking at any listing, ask: "Is the seller's loan FHA or VA?" If the agent doesn't know, check ACRIS. A motivated seller with a low-rate FHA loan may not even realize their loan is assumable — educating them can open the deal.
Go to acris.nyc.gov, search the address, and look at the most recent mortgage document. If the document type is "FHA MORTGAGE" or "VA MORTGAGE" and it was recorded after 2019, the loan is assumable. SellerFinanceNYC pulls and displays this data automatically for every property you click on the map.
Browse listings where sellers are actively offering mortgage assumptions across all five boroughs — filtered by rate, balance, and borough.
Search the Live Map → Or read the seller financing guide →