One Mortgage, Three Program Outcomes: The VA Assumption State Matrix
1. The event
A VA-guaranteed mortgage is assumed — the buyer takes over the loan instead of the seller paying it off. Federal program law makes this richer than a transfer: loan balance, borrower liability, and VA entitlement are three distinct state variables, and an assumption can move them differently.
2. Starting mortgage state
The same loan in every branch: $400,000 original, 6.00%, amortized to $351,089.42 at the assumption date; property $560,000 (HPI-projected); seller's VA entitlement $113,750 charged to the loan. Only the program/legal state differs between branches.
3. Three controlled branches
| A: release, no substitution | B: release + substitution | C: no approved release | |
|---|---|---|---|
| Loan continues at | $351,089.42 | $351,089.42 | $351,089.42 |
| Seller liability released | YES ($351,089.42 row) | YES ($351,089.42 row) | NO ($0.00 row) |
| Assumer liability opened | $351,089.42 | $351,089.42 | $351,089.42 |
| Seller entitlement | remains charged | restored (cascade fires) | remains charged |
| Statutory funding fee (0.5%) | ±$1,755.45 | ±$1,755.45 | ±$1,755.45 |
| Seller equity realized | $175,111.02 | $175,111.02 | $175,111.02 |
| MSR / g-fee streams | continue (0.0) | continue (0.0) | continue (0.0) |
4–5. What this shows
A vs B: identical liability outcome, different entitlement — release of liability alone does not free entitlement; substitution does (38 U.S.C. §3714; VA Lenders Handbook M26-1). A vs C: identical entitlement, different liability. The loan economics are identical in all three branches; the differences are program state, with liability and entitlement tracked separately.
6. Why positions differ
Servicing, guarantee-fee and investor streams continue in every branch — an assumption is a sale without termination; the engine's stream terminations are gated on loan termination, not on the sale.
7. What EVA computes
Deterministic program-state consequences: seller/assumer liability rows, the statutory fee as a payer/payee pair netting to zero, the restoration cascade only where substitution occurs, and journaled state transitions with statutory citations.
8. Outside the demonstrated scope
A dollar value for restored entitlement (the option to reuse VA financing) — deliberately UNVALUED; no defensible model has been authorized. Assumption processing timelines and fees beyond the statutory 0.5%.
9. Evidence / replay coordinate
engine10, us_housing_v9, POST /api/v1/firing/fire-event, source commit 422ea36a; identical payloads across branches (only event_id differs; closing costs supplied as an authentic event input); STATE_MATRIX.json + per-branch receipts + program-state journals alongside.