President Donald Trump has signed the VA Home Loan Program Reform Act into law, establishing a partial claims program aimed at preventing veterans from losing their homes to foreclosure. The new policy allows veterans who are behind on their mortgage payments to append those missed payments to the end of their loans.
This initiative effectively replaces the Veterans Affairs Servicing Purchase (VASP) program, which was introduced under the Biden administration in 2024 but was terminated by the Trump administration in May due to Republican criticisms regarding its cost and lack of congressional oversight. The VASP program had previously allowed the VA to purchase delinquent VA loans, adjust them, and offer borrowers a fixed 2,5% interest rate for the duration of the loan. However, the program faced significant backlash from Republicans, who argued that it was created without proper congressional input and posed a risk to the VA’s home loan guarantee program. The VA estimated that over 17,000 home loans totaling more than $5.48 billion were purchased under VASP.
The new legislation, passed by both the House and Senate in May and July respectively, is described as bipartisan and bicameral, with leaders from the House and Senate Committee on Veterans’ Affairs stating that it will assist financially distressed veterans and provide the VA with tools to help them avoid foreclosure. The VA Home Loan Program, established in 1944, has been a key benefit for veterans and their families.