Five Million Home Loans Under 4% Are Legally Yours to Take Over. The Catch Is the Cash.

If you are shopping for a house right now, you are being quoted 6.76 percent. That was Freddie Mac’s 30-year average in the week of September 10.

There is a cheaper mortgage already sitting inside some of the houses on your list. FHA, VA and USDA loans are assumable. A qualified buyer can take the seller’s loan, at the seller’s rate, and keep it for the rest of the term.

We pulled the raw file behind FHFA’s National Mortgage Database to find out how big that pool actually is. As of the first quarter of 2026, there were 12.06 million outstanding government-backed mortgages. Of those, 16.5 percent were written at a contract rate below 3 percent and another 26.9 percent between 3 and 4 percent.

That is 43.4 percent, or roughly 5.2 million loans, written under 4 percent and legally transferable to someone else.

Here’s what nobody in the transaction is paid to tell you: an assumption pays almost no one. The loan officer earns no origination. The listing agent gets a harder file. The servicer gets a capped fee. VA’s own rules let the holder charge $300 to process an assumption, or $250 if VA has to sign off first. Three hundred dollars, to move a loan worth six figures.

So it does not get pitched. It gets buried.

The catch, and it is a big one

You assume the balance, not the price. The seller’s equity is not part of the deal, and you have to hand it over in cash or cover it with a second mortgage at today’s rates.

The same FHFA file says how bad that gap usually is. Among government-backed loans, 56.7 percent have a mark-to-market loan-to-value at or below 60 percent. Translation: on more than half of these houses, the owner owes 60 cents or less on the dollar.

On a $400,000 house with a $200,000 balance, you need $200,000 to make the assumption work.

When it does work

Run the payment math and you see why people still chase it. Two hundred thousand dollars at 3.25 percent on a 30-year schedule is about $870 a month. The same $200,000 at 6.76 percent is about $1,299. That is $428 a month, or roughly $5,137 a year, for the identical debt. Check your own numbers in our mortgage calculator.

It works when the seller has not built much equity yet. A 2021 or 2022 FHA buyer who put 3.5 percent down is the ideal seller. Small gap, huge rate.

It fails on the long-tenured owner with 45 percent equity. Every time.

Do this

Ask your agent to filter for FHA and VA financing, then have them ask the listing agent one question: is the seller open to an assumption. Most will say they have never done one. That is not a no.

If it is a VA loan, the seller has a problem you should raise early. Unless you are an eligible veteran who substitutes your entitlement for theirs, the seller’s VA benefit stays encumbered by that loan until it is paid off. They may not know that. Find out before you spend three weeks on it.

VA’s list is short: the loan has to be current, you have to take on full liability, and you have to be creditworthy under the agency’s standards. If the servicer turns you down, VA gives the seller or the buyer 30 days to appeal.

Verdict: your call, and a long shot. But a $300 fee for a shot at $5,000 a year is the best-priced question in the whole transaction. More on financing in our mortgages hub.

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