VA loan assumption in Colorado
By Simon Dzienis, Colorado Realtor · Updated October 2026
Colorado has a lot of VA loans, especially around Aurora, Colorado Springs and Castle Rock. Many were written at 2–3% and can be taken over by the next buyer, veteran or not.
For buyers
- You don't need to be a veteran. The servicer approves you on credit and income.
- Funding fee: 0.5% of the loan balance, paid at closing (some disabled veterans are exempt).
- Equity gap: paid in cash or, since 2024 VA guidance, sometimes with a second lien behind the VA loan.
For VA sellers
- Entitlement: if a non-veteran assumes your loan, the entitlement used on it stays tied up until that loan is paid off. You may still have enough remaining entitlement to buy your next home with a VA loan.
- Substitution: if the buyer is an eligible veteran who substitutes their entitlement, yours is restored.
- Release of liability: request it so you're no longer responsible for the loan once the buyer is approved.
Timeline
Servicers with automatic authority generally have 45 days to decide on a complete package; files that need VA's review take longer. Plan for 60–90 days.
Questions people ask
Can a non-veteran assume a VA loan?
Yes, with the servicer's approval. The seller's entitlement stays with the loan unless a veteran buyer substitutes theirs.
What is the VA funding fee on an assumption?
0.5% of the loan balance, paid at closing, unless the buyer is exempt.
Can I buy another home with a VA loan after someone assumes mine?
Often yes, using your remaining entitlement. How much you can borrow depends on the county loan limit and the entitlement still tied to the assumed loan.