The House Committee on Veterans’ Affairs has announced the passage of HR 1815, the VA Home Loan Program Reform Act, a measure drafted to enhance foreclosure protections for U.S. veterans.
HR 1815 would:
- Establish a Partial Claim Program through which the U.S. Department of Veterans Affairs (VA) would pay lenders to prevent foreclosure on guaranteed loans that are delinquent or in default.
- Temporarily increase the amounts authorized for the Grant and Per Diem Program through which VA awards funding to organizations to provide transitional housing for veterans.
Sponsored by Wisconsin Rep. Derrick Van Orden, the VA Home Loan Program Reform Act would create a partial claim program as part of the VA Home Loan program to allow veterans who have fallen behind on their mortgages to receive federal assistance.
May 1 marked the expiration of the VA’s Veterans Affairs Servicing Purchase (VASP) program, a mortgage assistance option that allowed a number of borrowers to obtain an affordable payment when delinquent on their mortgage. Launched May 31, 2024, VASP would offer eligible borrowers a fixed 2.5% interest rate, providing a consistent, affordable payment for the remainder of their loan.
“This program has worked in the past, keeps vets and their families in their homes, and does so at a fraction of the cost of the horrific VASP program,” said Rep. Van Orden. “The VA Home Loan Program Reform Act is not just a fix—it is necessary course correction. I thank Chairman Mike Bost for his support on this legislation and helping it get over the finish line for our vets.”
On April 23, 2025, the U.S. Department of Veterans Affairs (VA) issued Circular 26-25-2, announcing the termination of VASP as of April 30, 2025 at 11:59 p.m. Effective May 1, 2025, the VA no longer accepts VASP submissions, and the VA announced it has rescinded the prescribed steps for considering vets for hardship assistance.
According to NPR, nearly 90,000 VA loans are seriously past due, with 33,000 of those already in the foreclosure process. The National Consumer Law Center (NCLC) reports that as of April 1, there were 75,000 veteran borrowers who had missed three or more payments on their VA-guaranteed mortgage. Among those, the VA reported that 17,000 had been accepted for VASP.
“The Biden administration was dead wrong to risk the future of VA’s Home Loan program by creating the VASP program, and the Trump administration was right to put an end to it. I am proud to have worked alongside my friend, Economic Opportunity Chairman Van Orden, our House Republican colleagues, and key stakeholders to create the right safety net for veterans who have fallen behind on their mortgage payments,” said Rep. Mike Bost. “Our bill is a fiscally responsible solution to ensure that veterans in financial hardship have access to the tools they need to stay in their homes. I look forward to seeing this commonsense, bipartisan bill passed in the Senate and signed into law by President Trump as soon as possible.”
Bob Broeksmit, CMB, President and CEO of the Mortgage Bankers Association (MBA) added, “MBA has been a fierce advocate for distressed veteran homeowners, working with a bipartisan group of lawmakers, Veterans Affairs (VA) staff, and our members to help keep them in their homes since the VA’s previous loss mitigation solution was terminated during the pandemic without a replacement. The need for a permanent partial claim option is urgent. We applaud the passage of this important bill, which gives the VA permanent authority to create a partial claims program that aligns with the loss mitigation options offered to borrowers across other federal housing agencies. We will continue to work with a bipartisan group of senators to get similar legislation passed as soon as possible. Thousands of struggling veteran homeowners risk foreclosure without this swift legislative action and subsequent implementation of a VA partial claim program.”
From 2021-2022, the VA had a separate hardship assistance program in which delinquent borrowers could put a past due balance at the end of the loan. This approach, known as the “partial claim,” was similar to one offered by the Federal Housing Administration (FHA). A partial claim allows veteran borrowers to bring their loan current, and resume their former payment. The borrower repays the deferred amount to VA when the loan pays off at 0% interest.
Click here for more on HR 1815, the VA Home Loan Program Reform Act.
