FAQs
How does an Exempt Transfer work for VA Loans in a Divorce?
If the non-veteran wishes to be released from liability, the Veteran must provide the below documents to go through an Exempt Transfer:
- Final Divorce Decree
- Recorded Quitclaim Deed
- Homeowner's insurance policy that lists only the awarded party as the insured.
However, if the Veteran is requesting to be released from liability, the non-veteran will be required to go through a qualified assumption process. This process involves submitting a loan application and undergoing a full credit underwriting review, which includes an analysis of income, credit, and assets. Additionally, the VA entitlement will remain with the property unless the assuming borrower is able to substitute the VA entitlement.
Download Assumption Scenario for a VA Exempt Transfer due to Divorce (PDF)