In which scenario does a veteran remain liable for payment after selling their home?

A veteran remains liable for payment after selling their home primarily in the scenario where they sell via loan assumption to a non-veteran purchaser. In this case, if a veteran sells their home and the buyer assumes the loan, the veteran does not get released from the obligation of the original loan. This means that the veteran is still responsible for the mortgage payments even though the property is under a different owner's name.

The reason this situation is critical stems from the nature of how VA loans work. While VA loans can often be assumable under certain conditions, if the buyer is not a veteran, this may not provide the same protections for the seller as it would if the buyer were also eligible for VA benefits. As a result, if the buyer defaults on the loan, the original veteran borrower remains liable.

In contrast, selling to another veteran may allow the original veteran to transfer the VA loan eligibility without retaining liability, and refinancing typically discharges the veteran from the previous loan obligations. Using a VA-backed loan does not directly relate to the liability after a sale; it primarily governs how the loan is structured and the benefits provided during the term of the loan.