By Prerna Kapoor, CLHMS | REAL Brokerage | August 9, 2026
I’ve had a few sellers ask me some version of the same question lately: “I got my loan in 2021 at under 3%. Is there any way to actually use that when I sell?” It’s a fair question. Freddie Mac’s weekly rate survey put the average 30-year fixed at 6.69% as of August 6, an 11-month high, and I’m hearing more buyers do the math out loud during showings. If your loan happens to be assumable, that gap between your rate and today’s rate is worth understanding before you list, not after an offer comes in.
Why This Suddenly Matters in Colorado’s Rate Environment
Two years ago, almost nobody asked about this. Rates were close enough to what sellers already had that assuming a loan wasn’t worth the paperwork. That’s flipped. A buyer stepping into a 2.75% or 3.5% loan from 2020 or 2021 instead of financing at 6.69% can be looking at a difference of hundreds of dollars a month, sometimes more on a larger loan. I wrote a few weeks ago about Colorado rates hitting a 2026 high, and this is the direct result: buyers are getting more creative about financing, and an assumable loan is one of the few tools that actually works in their favor right now.
Which Loans Actually Transfer (and Which Don’t)
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Assumability comes down to loan type, not lender preference. FHA, VA, and USDA loans are generally assumable. Conventional loans, the kind most Colorado buyers close with today, almost always carry a due-on-sale clause, which means the loan has to be paid off when the home changes hands. There’s no working around that one. So the first step, before you get excited about this as a selling point, is pulling your own loan documents or calling your servicer to confirm what you actually have. I wrote about the buyer side of this in a separate guide, but the seller side has its own set of tradeoffs worth walking through on its own.
What Assumption Actually Costs Both Sides
This isn’t a free transfer. On a VA loan, the assuming buyer pays a funding fee of 0.5% of the remaining balance, so on a $300,000 balance that’s $1,500. On an FHA loan, the servicer can charge up to $1,800 in processing fees under a rule change that took effect in August 2024, plus reasonable third-party costs like credit reports. The buyer still has to qualify with the servicer’s underwriting, so a low rate alone doesn’t guarantee approval. And this isn’t fast. Most assumptions take 45 to 120 days depending on the servicer, so if you’re under contract with a tight closing timeline, this can be the thing that stretches it.
The Equity Gap Nobody Talks About
Here’s the part that surprises most sellers. If your home is worth more than your remaining loan balance, and it almost certainly is if you bought a few years ago, the buyer has to cover that difference in cash or through a second loan. Say your home appraises at $600,000 and your assumable balance is $380,000. The buyer needs $220,000 from somewhere before closing, on top of the assumption fees. That gap financing isn’t always easy to find, and it can price out exactly the buyers who’d otherwise want your low rate the most. An assumable loan is a genuine negotiating point, but it’s not the same as a lower asking price, and it limits how much of an edge it actually creates for you at the negotiating table. If you want to see how this stacks up with your own numbers, my Colorado Seller Net Sheet guide walks through what you actually take home, gap financing scenarios included.
If You’re a Veteran Seller, Read This Part Twice
If your assumable loan is a VA loan, there’s a wrinkle that matters more than the fee schedule. Your VA entitlement stays tied to that property until the loan is paid off, unless the buyer is also a veteran willing to substitute their own entitlement for yours. In practice, most buyers assuming VA loans aren’t veterans, since VA loans are open to any qualified buyer, not just military families. That means your entitlement can stay locked up long after you’ve moved into your next home, which limits how much VA financing you can use again yourself. A formal release of liability through your servicer is the only real protection here, and it’s worth having your lender walk you through exactly what stays exposed before you agree to let a loan get assumed. I see this come up more than people expect around Colorado Springs, where a large share of my seller clients are current or former military, and it’s a very different conversation than what I cover in my VA loan guide for buyers.
Quick answers
How do I even know if my loan is assumable? Check your original loan documents for the loan type, or call your servicer directly. FHA, VA, and USDA loans are generally assumable. Conventional loans almost never are.
Does advertising an assumable loan mean I have to accept a lower price? Not automatically. It’s a genuine negotiating point given how much rates have moved, but the buyer still needs to cover the gap between the loan balance and your sale price, which limits how much of an edge it actually creates.
Can any buyer assume my VA loan? Yes, any qualified buyer can assume a VA loan, not just veterans. That’s exactly why the entitlement issue matters so much for you as the seller.
Prerna Kapoor | REALTOR® | Luxury Home Specialist
REAL Brokerage | 720-949-5450 | info@prernakapoor.com
CLHMS • RENE • PSA • ABR | International Sterling Society Award Winner
Prerna specializes in residential real estate across Parker, Aurora, Lone Tree, Castle Pines, Highlands Ranch, Cherry Creek, Greenwood Village, and Centennial. She speaks English, Japanese, and Hindi.
