Did You Know that FHA Mortgages are Assumable?

One benefit of FHA insured mortgages is that they are assumable to qualified buyers.  This means that if you have an FHA insured mortgage at today’s low rates and you’re selling your home during a higher mortgage rate environment, being able to offer a lower rate to potential buyers could provide a distinct advantage over other competing listings.

With how low mortgage rates have been and considering the the potential for inflation, odds are mortgage rates will be higher.  Being able to offer a lower than market rate by allowing a buyer to take over your existing mortgage instead of obtaining a new one at a much higher rate could make the difference between a buyer selecting your home over another when it comes time for you to sell.

However there are some things you may need to be aware of.  Should you allow your mortgage to be assumed by an approved buyer, you might continue to be liable for the mortgage unless you obtain a release of liability from your mortgage servicer (who  you make your mortgage payments to).   Should your buyer, for any reason, not be able to make the mortgage payments on your former mortgage, you may be responsible for payments and your credit impacted without the proper release of liability.

The Approval of Purchaser and Release of Seller (Form HUD-92210-1) is a form that you, the person allowing the person to assume your FHA insured loan, will want to keep a copy of once your lender completes it.  This is the one way to protect yourself in the event of a “worse case scenario” with the person who assumes the FHA mortgage.   The risk is too significant to the person allowing their mortgage to be assumed with this document.

To obtain a lower than current market mortgage rate is a win for qualified buyers too.  In the Seattle-Bellevue area, the current single family loan limit for FHA insured mortgages is $567,500 and FHA loans have become more popular in our current mortgage climate. NOTE: See the footer of this website for current FHA loan limits.

So if you have an FHA insured mortgage, count yourself lucky…when you go to sell your home in the future, you may have an advantage over homes you will be competing with…just be sure to protect yourself with the proper release of liability.

PS: If you are considering buying or refinancing your home located anywhere in Washington state, I am happy to help you! Click here to get current mortgage interest rates for your scenario!

EDITORS NOTE: This post was written back in 2010 and the content and guidelines are subject to change. I am not an attorney and cannot provide legal advice.


  1. Hey Di, I actually wrote a post about FHA mortgages being assumable last month:



  1. […] mortgages may be assumable to a qualified home buyer when you are ready to sell your […]

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