U.S. veterans experiencing financial difficulties, such as homes in danger of foreclosure, can now apply for new aid from the Department of Veterans Affairs (VA). If veterans are not cautious, there could be dangers, an attorney warned Military.com.
President Donald Trump signed the VA Home Loan Reform Act into law in 2025, which includes the VA’s new Partial Claim Program, which was publicly introduced this month. Veterans who are in mortgage default can be identified by mortgage providers and put on a three-month trial payment plan. The mortgage agency will then pay the veteran’s past-due mortgage balance to bring their account up to date if it is properly completed.
“There are advantages and disadvantages to this government program,” said Ryan Frasher, an Indiana foreclosure defense attorney. “One advantage is that it can help preserve a veteran’s previous interest rate, which is likely 4 to 7 percentage points lower compared to today’s interest rates.”
However, there is another potential hazard, according to Thrasher.
“The new VA program, without enforced guardrails, can strip the equity of the home and cause a never-ending cycle of a potential foreclosure if a veteran fails under the program and must re-apply additional times,” Thrasher said. “Each additional application would likely trigger a higher interest rate and loss of equity in the home.”
According to VA Secretary Doug Collins, the program’s goal is clear-cut and good: assisting veterans who are in danger of losing their homes.
“We are grateful to Congress and President Trump for creating VA’s Partial Claim Program, which will help keep thousands of Veterans in their homes,” Collins said.
Veterans Explore Their Options
The VA claims that after its prior mortgage rescue program expired in May 2025, over 10,000 veterans lost their homes. Approximately 90,000 more were either in the foreclosure process or had fallen behind on their payments. The government was able to intervene and assist in stabilizing loans as a result of the initiative’s termination.
However, many veterans had few options when it expired last year, and if they attempted to restructure their loans, their monthly payments would have increased. According to the VA, it helped 173,000 veterans avoid foreclosure in 2025 alone by working with mortgage providers, and it anticipates helping even more with the new Partial Claim program.
“VA is proud to help veterans get access to—and retain—their homes by guaranteeing home loans with zero-down payment requirements and competitively low interest rates,” the VA said in a statement announcing the new Partial Claim Program. “Since its home loan guaranty program began, VA has helped veterans, service members and survivors purchase more than 29 million homes, including more than 500,000 new home loans guaranteed in Fiscal Year 2025.”
However, Thrasher claimed that a lot of vulnerable veterans came to his Indiana, Ohio, and Illinois-based legal office, Cozmyk Law Offices, LLC, to fight for the right to remain in their homes.
Those who get foreclosure papers have been cautioned by the firm that they “only have a limited time” to submit a legal response. Individuals who fail to reply promptly or adequately risk severe repercussions “and may lose [the] ability to defend against the foreclosure.”
The VA Partial Claim program has eligibility requirements, one of which is a significant requirement. The amount determined to bring the defaulted loan current cannot be more than 25% of the outstanding principal balance, according to the program’s instructions on the VA website. For instance, the reinstatement amount cannot be more than $25,000 if the provider submits the Partial Claim TPP Event with a $100,000 outstanding principal balance.
Overall, Thrasher feels that companies like his can assist in this situation by providing veterans who are facing foreclosure with alternative options while managing the court files.
