FHA loans are assumable

A little-known FHA benefit is that the agency will allow a home buyer to “assume” the existing FHA mortgage on the home being purchased.

The buyer must still qualify for the mortgage with its existing terms but, in a rising mortgage rate environment, it can be attractive to assume a home seller’s loan.

5 years from now, for example, a buyer of an FHA-insured home can “inherit” a seller’s sub-4 percent mortgage rate.