Can you assume a VA loan near Fort Hood, and is it worth it?
Yes. VA loans are assumable, and many Killeen-area listings advertise a low-rate VA loan you can take over. The catch is the equity gap: you pay the difference between the price and the loan balance in cash or with a second loan, plus a 0.5% VA funding fee on the balance unless you are exempt. If you are a Veteran substituting your entitlement, that entitlement stays on this home until the loan is paid off or someone else substitutes theirs.
By Stephen Harris, Good Life Team | October 31, 2026
A 2.75% rate on a Killeen listing looks like the best deal in Central Texas. Sometimes it is. Other times the cash it takes to get that rate wipes out most of the savings.
We see more “assumable VA loan” in listing remarks around Fort Hood than almost anywhere else, and it makes sense. About two out of three Killeen closings in October used VA financing (CTX MLS, October 7 to 30, 2026). A lot of those owners bought in 2020 and 2021 when rates were near historic lows. Now they are on PCS orders, and the low rate is the strongest thing they have to offer.
Here is how we walk buyers through it before they write an offer.
The equity gap is the whole decision
When you assume a loan, you take over the seller’s remaining balance at the seller’s rate. You do not get a new loan for the full price. The equity gap is the difference between what you pay for the house and what is left on the loan.
Here is a simple illustration. These are round numbers to show the math, not a real listing or a rate quote.
- Price: $250,000 (Killeen’s median sale in October was $234,000)
- Assumable balance: $200,000 at 2.75%, 25 years left
- Equity gap: $50,000
You have three ways to pay for that house:
| Option | Cash for the gap | Monthly principal and interest |
|---|---|---|
| Assume and pay the $50K gap in cash | $50,000 | About $923 |
| Assume plus a $50K second lien (9%, 15 years) | $0 for the gap | About $1,430 ($923 + $507) |
| New VA loan on the full $250K (6.5%, 30 years) | $0 down | About $1,580 |
If you have $50,000 sitting in savings, the assumption is a strong payment. Most E-5 to E-7 buyers we work with do not, and that is normal. With a second lien, the payment gap to a new VA loan gets much smaller, and the second lien usually pays off on a shorter clock at a higher rate.
The gap also changes with the price. Every dollar you negotiate off the price comes straight out of the gap, because the loan balance does not move. That is why negotiation matters more on an assumption than on a normal purchase.
Can a second loan cover the gap?
VA allows secondary financing on an assumption, with conditions. The second lien sits behind the VA loan, its payment counts in your debt-to-income review, and you cannot take cash back from it (VA Circular 26-24-17). Not every lender offers these, and terms vary widely. Get the second-lien quote in writing before your option period ends.
Your entitlement and the costs nobody mentions
Entitlement is the amount VA will guarantee for you. It is what lets you buy with zero down. On an assumption, it works two ways:
- You substitute your entitlement. If you are an eligible Veteran or service member, your entitlement replaces the seller’s. The seller gets theirs back. Yours is now tied to this loan until it is paid off or a future buyer substitutes theirs.
- No substitution. A non-Veteran can assume a VA loan if they qualify. The seller’s entitlement stays tied up until the loan is paid off. Expect sellers to push back on this, and some will price it in.
That first point matters on a 2 to 3 year tour. If you plan to keep this house as a rental after your next PCS, the entitlement you used here is not available at full strength for your next VA purchase. That can mean a down payment at the next duty station. Your lender can show you your remaining entitlement before you commit.
Costs to plan for:
- VA funding fee: 0.5% of the assumed balance, so about $1,000 on a $200,000 loan. It cannot be rolled into the assumed loan. Veterans receiving VA disability compensation and some others are exempt (VA.gov funding fee page). If you are exempt, our post on the disabled veteran property tax exemption near Fort Hood is worth a read too.
- Servicer processing fee: capped by VA, usually a few hundred dollars.
- Normal Texas closing costs: title company fees, prorated property taxes, escrow setup for taxes and insurance, and a survey if needed.
How an assumption works in a Texas contract
The process looks like a normal Texas purchase with a few different parts.
- Verify the loan first. Ask for a recent mortgage statement. Confirm the balance, the rate, the payment, and that the loan is current.
- Write the offer with the TREC Loan Assumption Addendum. It spells out the assumed balance and what happens if the servicer does not approve you or the balance is off from what you were told.
- Use your option period. The option period is the short window, often 7 to 10 days, where you can walk away for any reason by paying a small option fee to the seller. Get your inspection, your second-lien quote, and your gap math done inside it. Our option fee and earnest money guide covers what you risk.
- Apply with the seller’s servicer. You do not get to shop lenders for the assumed loan. The servicer reviews your credit and income to the same standard as a new VA loan.
- Close at the title company once the servicer approves the assumption and any second lien is ready.
Timing is the part that trips up PCS buyers. Servicers often take longer than a purchase lender to approve an assumption. If your report date is fixed, build extra time into the closing date and talk to us about a backup plan. If you need to close before you report, read buying before you report to Fort Hood alongside this.
One more local pattern. Homes built in 2020 to 2024 and resold by owners are the slowest segment around Fort Hood, at a median of 103 days on market (Fort Hood Area Market Insights, October 2026). Many of those carry the low-rate loans. A seller who has been sitting for three months has room to move on price, and on an assumption, every dollar off the price shrinks your gap.
The listing agent works for the seller, and the servicer works for the loan. Our job is to sit on your side: check the numbers, write the addendum so you are protected, and negotiate the price with the gap in mind. That is what our Smart Buyer Plan is built for.
Frequently Asked Questions
Do I have to be a Veteran to assume a VA loan near Fort Hood?
No. Anyone who meets the servicer’s credit and income standards can assume a VA loan. If you are not a Veteran, the seller’s entitlement stays tied to the loan, so many Killeen sellers prefer a Veteran buyer who can substitute entitlement.
How much cash do I need to assume a VA loan?
You need the equity gap (price minus loan balance), the 0.5% funding fee unless you are exempt, and normal closing costs. A second lien can cover the gap, but its payment adds to your monthly cost.
Does assuming a VA loan use my VA entitlement?
Yes, if you substitute your entitlement for the seller’s. It stays tied to that home until the loan is paid off or another eligible buyer substitutes theirs, which can affect your next VA purchase after a PCS.
Can I still negotiate repairs and closing costs on an assumption?
Yes. You still get an option period and inspection under the TREC contract. On an assumption, a price reduction usually helps more than a seller credit, because a lower price shrinks the cash gap directly.
Run the math before you fall for the rate
An assumable VA loan is a great tool when the gap fits your cash and your plans for your entitlement. When it doesn’t, a new VA loan with zero down may be the better move. Our team runs both side by side for every buyer looking at an assumable home near Fort Hood.
If you’re buying in the Fort Hood area, book a free Smart Buyer Plan call. It’s 30 minutes to walk through your budget, your timeline, and the areas that fit, and how we protect you from first showing to closing. No pressure, no pitch. You can also text or call 256-226-2757 or email stephen@mygoodlifeteam.com. PCS buyers can start with our Fort Hood PCS guide.
About Stephen Harris & The Good Life Team
Stephen Harris is a Texas Real Estate Broker (TX license 677386, All City Real Estate) and leads the Good Life Team, a Central Texas team that represents home buyers in Killeen, Harker Heights, Copperas Cove, Belton, Temple, Nolanville, Hutto, Pflugerville, and Round Rock. The team specializes in relocation buyers, Fort Hood PCS moves, VA loans, and new-construction representation, with roughly 500 closings and about $100M in volume. Their Smart Buyer Plan is built around one idea: who represents you matters, and our job is to protect you.
Stephen Harris is a real estate broker, not a lender. This article is general information, not lending, legal, or tax advice. Confirm loan terms and eligibility with a VA-approved lender and the loan servicer, and see VA.gov for current rules. The Good Life Team is not affiliated with or endorsed by the Department of Veterans Affairs or the Department of Defense, and has no material relationship with any lender or servicer mentioned. Market figures: CTX MLS data compiled by the Good Life Team, October 2026. Texas law requires all license holders to provide the Information About Brokerage Services and Consumer Protection Notice.