Assumable loans increasing – not here so far

Don Fenley 

GRAY – While monthly existing home sales continue retreating to pre-pandemic levels, the share of mortgage types has not significantly changed. That doesn’t conform to national reports of the number of sales with assumable loans increasing.

According to a Marketwatch report, some agents are advertising assumable mortgages. Locally, there was one Sept. sale with an assumed mortgage, but a quick sampling of Realtors® didn’t turn up much to show the trend is taking hold here.

Marketwatch’s report says, “Certain home loans backed by U.S. government agencies, such as the Federal Housing Administration, Veterans Affairs and the U.S. Department of Agriculture, allow the homeowner to pass on their mortgage — and the low rate that comes with it — to the next owner, which at least in theory will make the buyer’s monthly payments lower.”

According to The Northeast Tennessee Association of Realtors® (NETAR), convention loans accounted for just under half (48%) of Sept. loans, followed by cash sales (33%) and VA loans (10%) then FHA loans (6%).

FHA loans were the only market share decrease of note. In Aug. they accounted for 11% of sales and 10% in July.

What did increase was the discount on listing price by the number of sales in each loan sector.

The largest avg. discount ($10,837) was with VA loans.

The avg. discount for all residential loans was $7,696.

Conventional loans had an avg. discount of $7,852.

THDA loans had an avg. discount of $3,879.

VA loans saw an avg. discount of $3,533.

The outliers were:

One assumed loan with a sales price of $399,540 that was discounted $360.

One owner financed sale for $280,254 with a $9,000 discount.

NETAR is the voice for real estate in Northeast Tennessee. It is the largest trade association in the Northeast Tennessee, Southwest Virginia region, representing over 1,800+ members and 100+ business partners involved in all aspects of the residential and commercial real estate industries. Weekly market reports and information for both consumers and members are available on the NETAR website at