Which type of loans are assumable without the permission of the lender?

Assumability of loans refers to the ability to transfer the loan from the current borrower to a new borrower without needing to obtain the lender's permission. The correct choice highlights that FHA (Federal Housing Administration) and VA (Department of Veterans Affairs) loans are typically assumable without requiring lender approval.

FHA loans are designed to help lower-income and first-time homebuyers, and part of this assistance includes making the process of transferring loans simpler. This means that if the original borrower sells the property, the new buyer can assume the existing FHA loan. The same principle applies to VA loans, which are intended for veterans and military members. The benefits of assumability, in this case, can be attractive in a rising interest rate environment, as a buyer can take over a loan with a lower interest rate.

Conventional loans, on the other hand, do not generally allow for this type of transfer without the lender's consent. This means that a borrower looking to sell a property with a conventional loan would need to pay off the loan entirely at the time of sale or have the buyer secure a new loan independently.

Therefore, the ability to transfer FHA and VA loans without lender permission makes them unique compared to other types of loans, reinforcing the importance of understanding how