Today, assumable mortgages are primarily limited to government-backed loans, including Veterans Affairs (VA), Federal Housing Administration (FHA), and Department of Agriculture (USDA) mortgages.
“Twenty per cent (20%) to 25% of the homes on the market will be fully assumable at one time,” Raunaq Singh, CEO of assumable mortgage platform Roam, told CNBC. “[But] the number of assumption transactions that are happening is far fewer than the number of mortgages which can be assumed.”
Though assumable mortgages remain a niche option, they’re gaining traction. In 2023, FHA-backed mortgage assumptions rose by 59% compared to 2021, with 4,052 assumptions completed. The VA has seen an even more dramatic increase, with 713% more assumptions in 2023 compared to 2021.
Both the VA and FHA are on track to surpass last year’s totals, with each having completed over 5,000 assumptions in 2024 so far.
Despite this growth, assumable mortgages remain a niche option. FHA loans made up 15.9% of total mortgage applications last week, down slightly from 16.2% the previous week, according to the Mortgage Bankers Association (MBA). VA loans accounted for 16.2% of applications, down from 16.9%.