If the Lawrences sell their home to a non-veteran who intends to assume their VA loan, which statement is true?

When the Lawrences sell their home and a non-veteran buyer assumes their VA loan, their entitlement related to the loan will not be fully restored until the mortgage is paid off. This is because a VA loan allows for the transfer of the loan to another party, but the original borrower remains liable for the debt unless the loan is paid in full. Consequently, until the buyer pays off the loan, the Lawrences' remaining entitlement remains tied to that specific mortgage. This means they still hold a financial burden related to the loan and cannot utilize their full VA benefits for another loan until it is completely satisfied.

The other options present scenarios that are not applicable in this context. For instance, the automatic restoration of full entitlement does not occur with an assumption for a non-veteran. Instead, the Lawrences must settle the loan to regain their full VA loan entitlement. Moreover, assuming the loan does not lead to a denial of the assumption, provided the lender agrees to the terms. Additionally, while the Lawrences' VA benefits remain intact during this process, they do not lose all associated benefits; they merely cannot access their full entitlement until the existing loan obligation is cleared.