What is Assumability?

Assumability in Relation to HUD 223(f) Loans

Assumability is the ability to transfer an outstanding mortgage and its terms from the current owner to a buyer, thus allowing the new buyer to acquire the property without obtaining a new mortgage. In the case of HUD 223(f) loans are fully assumable with lender approval and a 0.05% fee.

The Benefits of Loan Assumability for HUD 223(f) Loan Borrowers

Having an assumable loan can make your property significantly more marketable, especially in an environment where interest rates are rising. This is because a new borrower would not be able to get loan with a comparable interest rate on the open market, and could save a significant amount of money as a result of the loan assumption.


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