Because of the popularity of due-on-sale clauses, it can be difficult to find an assumable mortgage. Some possibilities include: old mortgages, VA or FHA loans, or risk taking.
Old Mortgages – People holding loans made before the late 70’s may not have signed paperwork with a due-on-sale clause. Consider looking at homes in older, more established neighborhoods where elderly residents have lived for 30-40 years.
VA or FHA Loans – Loans from the Federal Housing Administration and Veterans Affairs are assumable. However, the new buyer must be approved. Generally, the approval process requires a credit check and income verification.
Risky Agreements – Currently, it is very rare for a lender to actually call a loan due because of an assumable mortgage agreement. Some buyers and sellers choose to ignore the due-on-sale clause and make a deal anyway. However, this can be risky. It may not be illegal to create an assumable mortgage, but hiding the arrangement from the lender could be considered fraud.