Arizona Loan Assumption Addendum

Seller Resources/Contracts & Addenda

Loan Assumption Addendum

When a buyer wants to take over your loan.

Some loans, often FHA and VA, can be assumed. A buyer may want your lower interest rate, and that can make your home stand out. The Loan Assumption Addendum sets the terms, and it’s important to understand your risks before agreeing.

What the Addendum Covers

Buyer’s approvalThe sale can be contingent on the buyer qualifying for the assumption no later than 3 days before closing.

Your credit reviewYou can require the buyer’s credit report and loan application within 3 days, and disapprove within 3 days after receipt.

The differenceThe gap between the price and your loan balance is paid by the buyer, in cash or another agreed way.

ImpoundsYou bring impound accounts current, prorated at closing.

Assumption feesThe addendum states who pays assumption and transfer fees.

Mortgage insuranceIf the loan carries mortgage insurance, the buyer assumes it.

Risks to Understand

You may stay liable

Unless your lender releases you in writing, you may remain responsible if the buyer later defaults. The sale can be made contingent on that release.

VA entitlement

With a VA loan, your entitlement may stay tied to the loan unless an eligible buyer substitutes theirs.

Due-on-sale clauses

Some loans let the lender demand full payment when the home sells, unless the lender waives it in writing.

Sample Forms

Blank Arizona REALTORS® samples for reference. We’ll complete the current version together.

Loan Assumption AddendumUpdated Jan 2014 · 2 pagesTerms for taking over a seller’s existing loan.View sample (PDF) →

Unfamiliar term? Browse the Real Estate Glossary →

General information only, not legal advice. Based on the Arizona REALTORS® Loan Assumption Addendum (January 2014); your signed addendum and contract control.