I know that’s hard to believe if you’re three months behind on your VA mortgage right now. Your servicer probably told you to sell or face foreclosure. Maybe you think there’s no help coming.
Wrong.
President Trump signed the VA Home Loan Program Reform Act into law on July 30, 2025, and it changes everything for veterans facing financial trouble. This isn’t some feel-good government program that sounds nice but doesn’t actually work. This is real help that could save your house.
Key Takeaways
- The new VA partial claim program can cover up to 25-30% of your loan balance to make you current
- Zero percent interest if you start payments within one year, only 0.5% if you don’t
- One-time use per loan, but doesn’t affect your future VA loan eligibility
- Program should be running within 60 days of Trump signing the bill
- Your credit gets protected – no foreclosure or additional late payments reported
Look, I’ll be honest – the situation over the past year has been rough for veterans.
For months, veterans have been stuck in a tough spot with limited options. The VA had a program called VASP that helped over 33,000 veterans avoid foreclosure. Then they shut it down in May without replacing it with anything.
That left about 79,000 veterans and active duty troops who were behind on payments with two choices. Sell their homes or get foreclosed on.
Most regular homeowners have better options than veterans had. Think about that. People who never served their country had more VA foreclosure protection than the men and women who earned these benefits through military service.
But here’s the good news – that’s all changed now.
The new law creates a permanent solution that puts veterans back where they belong – with the same protections as everyone else, plus the benefits they’ve earned through service.
What This New Law Actually Does
President Trump signed H.R. 1815 into law on July 30, 2025. This creates something called a VA partial claim program.
Here’s how it works. If you fall behind on your VA mortgage payments, the VA can step in and pay your lender whatever amount is needed to make your loan current. That money becomes a separate loan from the VA that you pay back later.
The best part? This separate loan has zero percent interest if you agree to start making monthly payments within a year.
Let me explain exactly how this works because most people don’t understand it.
How the VA partial claim program works to help veterans keep their homes
The Step-by-Step Process
You fall behind on payments because life happens. Job loss, medical bills, divorce, deployment issues. Whatever.
The VA makes a partial claim. Instead of letting you go into foreclosure, they pay your lender enough to make your mortgage current again. This can be up to 25 percent of your loan balance. If you became behind between March 2020 and May 2025, it can be up to 30 percent.
The VA gets a second lien on your property for the amount they paid. Your original VA loan stays in first position.
Your original mortgage is now current so you resume making regular monthly payments.
You pay back the VA later when you refinance, sell your home, or pay off your mortgage. If you start making monthly payments on this amount within a year, there’s no interest. If you don’t, it’s only 0.5 percent annually.
Why This Gives Me Hope for Veterans Right Now
I’ve been doing VA loans for over 20 years. The past few years have been tough to watch – seeing veterans lose their homes because of bureaucratic problems and political disagreements.
But this new law changes that. The Mortgage Bankers Association, veterans groups, and lawmakers from both parties all came together to create something that actually works for veterans.
Now veterans have the same foreclosure protection options as everyone else – and then some.
FHA borrowers have partial claim programs. USDA borrowers have them. Regular loan borrowers have them. Now veterans do too, with terms that recognize their service and sacrifice.
This law fixes that gap and gives veterans the protection they deserve.
What to Do if You’re Already Behind on Payments
If you’re currently behind on your VA mortgage, here’s what you need to do right now.
- Contact your mortgage servicer immediately. Tell them you want to know about loss mitigation options including the new partial claim program once it’s ready.
- Don’t panic if they don’t know about it yet. The VA still needs to set up the program and train servicers on the new procedures. This will take some time.
- Write down everything. Keep records of all your talks with your servicer about your financial problems.
- Stay in your home. Don’t think you have to sell or accept foreclosure just because that’s what your servicer said last month.
The VA said they’ll get this program running quickly now that President Trump has signed the law. They know there are tens of thousands of veterans waiting for help.
How Much Help You Can Get
The VA partial claim program has specific limits but they’re big enough to help most veterans in trouble.
Standard limit: 25 percent of your loan balance. If you owe $300,000 on your mortgage, the VA could pay up to $75,000 to bring your loan current.
Enhanced limit: 30 percent for COVID-era hardships. If you first became behind between March 1, 2020 and May 1, 2025, the limit goes up to 30 percent of your loan balance.
You can only use this benefit once per loan unless you face hardship during a presidentially declared major disaster.
For most veterans who are three to six months behind on payments, these limits give more than enough help to get back on track.
The Real Impact – Hope for Thousands of Veterans
This program could help more than 20,000 current borrowers who are seriously behind to keep their homes according to the Senate Veterans Affairs Committee. But I think the real number will be much higher once veterans understand what’s available.
The impact goes way beyond just stopping foreclosures.
This program gives veterans breathing room to get their finances back together. Instead of facing the stress and credit damage of foreclosure, you get a chance to stabilize your situation and keep building equity in your home.
Plus, the law makes permanent the VA’s policy allowing veterans to directly pay their real estate agents. This means you can compete on equal footing with other buyers when it’s time to buy your next home.
What About the Old VASP Program
I know some of you got help from VASP before it was shut down. Good news. This partial claim program doesn’t affect your VASP loan. You can keep the low-interest rate loan you got through that program.
VASP helped over 33,000 veterans avoid foreclosure by purchasing more than 17,000 behind loans valued at nearly $5.5 billion. The program worked but Republicans in Congress worried about the long-term cost to taxpayers because the VA was holding these loans itself.
The new partial claim program is different. Instead of the VA taking over your entire loan, they just help with the behind amount and get a second lien position. This reduces the government’s risk while still giving real help to veterans.
The Political Background That Created This Mess
This whole mess started because different administrations kept changing the rules on veterans.
2022: The Biden administration ended a previous partial claim program, leaving veterans with fewer options.
2024: Biden’s VA created VASP as an emergency measure to help veterans facing foreclosure.
2025: The Trump administration shut down VASP, leaving veterans with almost no VA foreclosure protection.
July 30, 2025: President Trump signed the VA Home Loan Program Reform Act into law.
The blame for this situation is bipartisan, according to NPR’s analysis. Veterans got caught in the middle of political fights about the best way to help them.
What matters now is that the law is signed and creates a permanent program that should survive future political changes.
When This Program Will Start
The VA hasn’t announced specific timelines yet, but here’s what we know:
- Law signed: President Trump signed the legislation on July 30, 2025
- Short-term: The VA needs to write regulations and train servicers on the new procedures
- 30-60 days: Most experts expect the program to be running within two months of the law being signed
If you’re currently facing foreclosure, reach out to your servicer now to see if they’ll postpone any foreclosure proceedings until the new program is available.
Other Benefits in the VA Home Loan Program Reform Act
The VA Home Loan Program Reform Act isn’t just about foreclosure prevention. It also:
Increases funding for homeless veteran programs from $258 million to $344 million annually for 2025 and 2026.
Requires the VA to report to Congress on how to make sure veterans aren’t disadvantaged when working with real estate agents.
Establishes loss mitigation procedures. The VA must create standardized procedures for helping veterans avoid foreclosure.
What This Means for Your Credit
One of the biggest advantages of the VA partial claim program is credit protection.
When the VA makes a partial claim payment, your original mortgage becomes current. This means:
- No foreclosure on your credit report
- No additional late payments reported
- Your credit score can start recovering immediately
Compare this to foreclosure, which stays on your credit report for seven years and makes it nearly impossible to get another mortgage during that time.
Common Questions Veterans Ask Me
Does this cost me anything upfront?
No. The VA pays your lender directly, and you don't need cash.
Will this affect my VA loan eligibility in the future?
No. Using the partial claim program doesn't impact your ability to use your VA loan benefit again.
What if I can't make the monthly payments on the partial claim?
You have flexibility. If you can't start payments within a year, the interest rate is only 0.5 percent annually. Much lower than most other options.
Can I use this program more than once?
Generally, no. You get one partial claim per loan, unless you face hardship during a presidentially declared disaster.
What happens if I sell my home before paying back the partial claim?
The partial claim gets paid off from your sale proceeds, just like any other lien on your property.
Steps to Take Right Now
If you’re behind on your VA mortgage payments:
- Contact your servicer immediately and ask about loss mitigation options
- Write down your financial hardship with pay stubs, medical bills, or other proof
- Don’t agree to foreclosure – tell them you want to wait for the new partial claim program
- Keep making any payments you can to show good faith
- Stay in contact with your servicer about program availability
If you’re current on your payments but worried about the future:
- Understand your benefits – you have more protection than most homeowners
- Contact your servicer early if you think problems are coming
- Keep documentation of any financial hardships you face
Veterans now have permanent foreclosure protection through the Reform Act
Why I’m Confident This Program Will Work
Instead of just hoping things work out, veterans now have a concrete solution that’s been tested and proven effective in other government loan programs.
This new VA partial claim program gives veterans real protection with a permanent solution. The Mortgage Bankers Association calls it a big step forward in making sure that struggling veteran homeowners have access to a proven and sustainable loss mitigation solution.
Even better, it passed both houses of Congress with overwhelming bipartisan support and was signed into law. That tells me it’s built to last through future political changes.
Veterans deserve better than to worry about losing their homes during financial hardships. This program gives you the protection you’ve earned through your service – and it’s here to stay.
Your Path Forward Starts Now
The VA Home Loan Program Reform Act creates real VA foreclosure protection for veterans struggling with mortgage payments. The new VA partial claim program can help bring your loan current with zero or minimal interest, giving you time to get back on your feet.
You have options now. Real options that recognize your service and give you the tools to keep your home.
If you’re behind on payments, there’s reason for hope. Help is coming, and it’s designed specifically for veterans who’ve served their country.
The days of choosing between selling your home and foreclosure are over.
Your service earned you these benefits. Don’t let financial hardship cost you the home you’ve worked to build.
About The Author - Jason Skinrood
