Release of liability when someone assumes your mortgage
A release of liability is the servicer's (and for VA loans, the VA's) written confirmation that you're no longer responsible for the mortgage after a buyer assumes it. You get it when the loan is current and the servicer approves the buyer's credit and income and the buyer formally agrees to take over the debt.
Without a release, you can still be held responsible if the new owner stops paying, so make the release part of the assumption approval, in writing, before you close.
What the release requires
- The loan is current at the time of the assumption.
- The buyer is approved as creditworthy by the servicer (credit, income and, for VA loans, residual income).
- The buyer signs an assumption agreement, taking on the obligation to repay the loan.
FHA loans
For FHA loans that require a credit review (most loans originated since the late 1980s), the servicer reviews the buyer and, once approved, releases the seller. The release is documented on HUD form 92210.1, "Approval of Purchaser and Release of Seller." HUD caps the servicer's assumption processing fee at $1,800 (raised from $900 in 2024), plus actual costs such as the credit report.
VA loans
For VA loans, the servicer approves the buyer (or sends the file to the VA) and the seller is released from liability to the VA once the conditions above are met. The buyer pays the 0.5% VA funding fee unless exempt, and the VA limits the processing fee the servicer may charge. A release of liability is separate from your entitlement: unless a veteran buyer substitutes their entitlement, part of yours stays tied to the loan. See your VA entitlement after an assumption.
Why "subject-to" deals don't release you
In a "subject-to" sale, the buyer takes title and makes your payments without the servicer approving them. The loan stays in your name, so missed payments hit your credit, and the servicer may be able to call the loan due under its due-on-sale terms. A formal assumption with a release avoids both.
Checklist before closing
- Ask the servicer, in writing, to confirm the approval includes your release of liability.
- Keep your payments current until the loan transfers.
- Get a copy of the signed assumption agreement and the release at or after closing.
- Check your credit report a couple of months later to make sure the loan shows as transferred or closed for you.
Frequently asked questions
Am I still liable for my mortgage after someone assumes it?
Not if the servicer approves the buyer and issues a release of liability. Without a release, you can remain responsible if the buyer defaults.
How do I get a release of liability on an FHA loan?
The buyer applies to your servicer for a creditworthy assumption. Once approved, the servicer releases you, documented on HUD form 92210.1.
Does a VA release of liability restore my entitlement?
No. The release ends your responsibility for the debt, but your entitlement is only restored if a veteran buyer substitutes their entitlement or the loan is paid off.
Does a subject-to sale release the seller?
No. In a subject-to sale the loan stays in the seller's name and the seller remains liable.
Get the assumption done right
AssumptionHub coordinates the buyer's qualification and the servicer so the approval and your release are in place before closing.
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