A veteran in Texas sells a home financed with a VA loan. The buyer wants to assume the VA loan. If the lender approves the assumption and releases the veteran from liability, what happens to the veteran's VA entitlement?
Correct Answer
B) The entitlement remains tied to the assumed loan and is not restored until the assuming buyer pays off the loan or the VA is released from the guaranty
When a VA loan is assumed, the veteran's entitlement used for that loan remains committed until the loan is paid off or the VA guaranty is otherwise released. Even if the veteran is released from personal liability, the entitlement is not restored until the underlying guaranty obligation ends.
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