What is required for a veteran to restore their loan benefits after selling under an assumption?

In the context of restoring VA loan benefits after selling a home under an assumption, the correct answer focuses on the process where another veteran can step into the original veteran's loan benefits. When a veteran sells their property and that sale involves the loan being assumed by another party, the original veteran's eligibility for future VA loans can be restored through the substitution of eligibility process. This allows another eligible veteran to take over the benefits associated with that loan, thus freeing up the original veteran's entitlement without requiring them to pay off the entire mortgage.

This process is beneficial as it provides both the selling veteran and the new borrower with options regarding VA loan benefits, ensuring that the selling veteran's eligibility for future loans can be reinstated effectively. Therefore, substitution of eligibility by another veteran is a key aspect that allows for this restoration process to take place smoothly. In contrast, full repayment of the mortgage or seeking approval from the Department of Veterans Affairs do not directly facilitate the restoration of benefits in the context of an assumption sale.