When it comes to buying a home in Hawai‘i, military families have one of the most powerful tools available — the VA Home Loan. But in today’s high-interest rate environment, another option has gained major attention: VA loan assumptions. If you’ve heard the term but aren’t sure what it means, or whether it’s even possible for you, this guide will break it all down.
What Is a VA Loan Assumption?
A VA loan assumption allows a buyer to take over the seller’s existing VA loan — including its interest rate, balance, and terms.
That means if a service member purchased a home with a VA loan at 3% interest, and today’s rates are sitting closer to 6–7%, a buyer assuming that loan could essentially “inherit” that lower rate.
On O‘ahu, where the median single-family home price is over $1.1 million (as of 2025), the difference between a 3% and 7% loan can mean thousands of dollars in monthly payments.
Who Can Assume a VA Loan in Hawai‘i?
Here’s where things get tricky — and often misunderstood.
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Veterans and Active-Duty Service Members with VA Eligibility:
These are the primary candidates. When a qualified VA buyer assumes the loan, the original seller’s VA entitlement is released, and the benefit continues with the new buyer. -
Civilians (Non-VA Buyers):
Yes, civilians can assume a VA loan under certain circumstances. But in this case, the seller’s VA entitlement remains tied up until the loan is fully paid off. For many veterans, this creates a huge disadvantage because it prevents them from using their VA benefit again.
Bottom line: Most industry experts — myself included — believe VA loan assumptions should remain primarily for those who earned the benefit.
The Benefits of a VA Assumption
For those who qualify, the perks are massive:
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Low Interest Rates: Inheriting a 2–3% loan in today’s market is life-changing.
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No New Loan Fees: Unlike a traditional mortgage, assumptions may save you on origination and closing costs.
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Faster Closing: VA assumptions can often close in 45–60 days, making them competitive in Hawai‘i’s fast-moving market.
The Challenges of a VA Assumption
While exciting, assumptions aren’t always simple.
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Limited Inventory: Only a small fraction of homes are VA-assumable. You need to act fast when one hits the market.
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Entitlement Tied Up: If a civilian assumes the loan, the original VA borrower’s benefit remains locked.
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Qualification Still Required: Buyers must still meet credit and income requirements to take over the loan.
Why VA Assumptions Matter in Hawai‘i
In a market like O‘ahu, where affordability is a constant challenge, VA assumptions can make the difference between renting and owning. A loan at 3% with payments around $5,400 on a Kaimukī property looks far more attractive than a 7% loan with payments pushing well over $7,000.
For military families PCSing to Hawai‘i, this is one of the smartest ways to maximize your Basic Allowance for Housing (BAH) while also building equity.
Should Civilians Be Allowed to Assume VA Loans?
This question sparks a lot of debate. From my perspective as a military spouse and real estate professional in Hawai‘i, I believe:
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VA loans are a hard-earned benefit for those who’ve served.
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Civilians assuming VA loans should remain the rare exception, not the rule.
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Protecting veterans’ entitlements ensures they can continue to use their benefit as they relocate or transition.
Final Thoughts
VA assumptions aren’t common, but they’re powerful. If you’re a veteran or active-duty service member relocating to Hawai‘i, this option can save you thousands of dollars and help you achieve homeownership in one of the most competitive housing markets in the U.S.
If you want to explore VA assumptions or see if you qualify for one here on O‘ahu, I’d love to guide you through the process.
Contact Kina Knisley, Team K² – Keller Williams Honolulu
Your Hawai‘i Relocation and Military Home Expert
