More action is needed to give Veteran borrowers and their families the assistance they deserve
WASHINGTON – Yesterday, in a significant victory for Veteran homeowners and their families, the VA Home Loan Program Reform Act was enacted into law. The new law provides a path for Veteran homeowners who have fallen behind on mortgage payments to get current on payments and avoid foreclosure. The new “partial claim” bill helps fill the gap in assistance created by the abrupt cancellation of the Veterans Affairs Servicing Purchase (VASP) in May, which created confusion and anxiety and put struggling Veteran borrowers at risk of foreclosure.
“Passage of the partial claim bill will provide meaningful payment assistance to VA borrowers in financial distress,” said Mike Calhoun, President of the Center for Responsible Lending. “We encourage Congress to give VA additional financial hardship tools offered by other federally backed mortgage programs to help Veterans avoid unnecessary foreclosures and remain in their homes.”
The bill allows delinquent borrowers with Department of Veterans Affairs loans to put a past due balance at the end of the loan. This approach, known as the “partial claim,” is similar to one offered by the VA from 2021-2022 and by the Federal Housing Administration. A partial claim allows the Veteran to bring their loan current and resume their former payment. The borrower repays the deferred amount to the VA at 0% interest when the loan pays off.
“We applaud Congress for passing the partial claim bill. It is an important first step toward giving Veterans the help they need and deserve when they face financial hardship and possible loss of their homes,” said Steve Sharpe, Senior Attorney at the National Consumer Law Center. “The VA now must streamline the new program to promote broad and timely access. We also call on Congress to work on further improvements to VA's foreclosure prevention toolbox.”
Even with enactment of the partial claim bill, Veteran borrowers still have substantially worse options than other borrowers with federally-backed mortgage loans. To bring the relief for VA-borrowers on par with the relief for other borrowers, Congress must further improve the partial claim program and must develop an option for borrowers who need monthly payment relief when they fall behind on their mortgages. In addition, the VA must act quickly to implement the new law to avoid unnecessary foreclosures of borrowers who may be eligible for partial claims.
As of April 1, there were 75,000 Veteran borrowers who had missed 3 or more payments on their VA-guaranteed mortgage.
Related Resources
- Advocates, Members of House Committee on Veterans’ Affairs Call on VA to Revive VASP Program, May 20, 2025
- Abrupt End of VASP Program Leaves Veterans, Families at Risk of Home Loss, May 1, 2025
- Joint Letter Regarding Veterans Affairs Servicing Purchase, January 17, 2025
- New VA Program to Provide Home Loan Assistance to Active-Duty Servicemembers and Veterans, April 10, 2024
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Press Contacts
- Center for Responsible Lending: Matthew Kravitz, matthew.kravitz@responsiblelending.org
- National Consumer Law Center: Stephen Rouzer, srouzer@nclc.org
The Center for Responsible Lending is a non-partisan, nonprofit research and policy advocacy organization working to promote financial fairness and economic opportunity for all, end predatory lending, and close the racial wealth gap.
Since 1969, the nonprofit National Consumer Law Center® (NCLC®) has worked for consumer justice and economic security for low-income and other disadvantaged people in the U.S. through its expertise in policy analysis and advocacy, publications, litigation, expert witness services, and training.