Which types of loans do not allow assumptions?

Conventional conforming and USDA loans typically do not allow for assumptions. An assumption is when a buyer takes over the mortgage payments of the original borrower. Conventional loans, which meet the guidelines set by Fannie Mae and Freddie Mac, and USDA loans are often designed for a more standardized qualification process. Because these loans are not insured or guaranteed by a government agency, lenders retain more strict control over who is responsible for the mortgage. As a result, these loans generally require the buyer to qualify for a new loan rather than allowing the existing loan to be assumed.

In contrast, FHA and VA loans are designed with certain borrower protections, including the ability for qualified buyers to assume the loan under specific circumstances. Subprime loans can vary significantly, but many may allow for borrower assumptions due to their more flexible qualifying criteria. Therefore, the correct understanding of these loan types reveals why conventional conforming and USDA loans are indeed those that do not typically permit assumptions.