New Law Will Help Veterans Keep Homes After VA Loan Payment Struggles

Congress has passed a bipartisan bill aimed at preventing foreclosure for veterans.

The establishment of a lasting VA-backed mortgage assistance initiative in the Senate is expected to pave the way for a collaborative effort aimed at safeguarding veterans' homes.

Cast your vote audibly. A new limited claims program approved Tuesday night allows veterans to push back missed home payments to the end of their loan term, helping them avoid foreclosure. The House has passed the bill and now awaits Trump's approval.

Both parties expressed their support for the bill, which aims to address veteran homelessness and assist those facing financial difficulties.

“This bipartisan and bicameral legislation will assist veterans who are facing financial hardships and provide VA with a tool to help better veterans stay in their homes,” stated Senate Veterans Affairs Committee Chairman Jerry Moran (R-KS), along with Ranking Member Sen. Richard Blumenthal (D-CT), House Committee Chairman Mike Bost (R-IL), and Rep. Mark Takano.

This initiative reinstates and formalizes a COVID-19 relief measure that the VA had temporarily implemented but discontinued in 2022 due to the expiration of congressional authorization.

According to NPR, a significant number of veterans face the threat of foreclosure, leading the Biden administration to initiate VASP in 2024. VASP enabled the VA to acquire defaulted loans, take on the role of primary servicer, and offer alternative payment options to borrowers in distress.

Critics from the Republican side argued that the government overstepped its authority in organizing VASP and raised concerns about potential risks to taxpayers. In May 2025, the VASP program came to an end during the Trump administration, sparking worries that as many as 80,000 veterans might face the risk of losing their homes without an alternative in place.

The substitution comes from the legislation. Mortgage servicers will now have the ability to provide veterans with VA loans the opportunity to delay missed payments and extend the loan term, rather than requiring lump sum payments or issuing foreclosure notices.

Advocates from veterans' organizations and leaders in the mortgage sector rallied in support of the legislation, deeming it crucial for addressing the housing needs of veterans.

In May, Bob Broeksmit, the president and CEO of the Mortgage Bankers Association, emphasized the pressing need for a permanent partial claim option. “A significant number of veteran homeowners facing difficulties are in jeopardy of foreclosure unless immediate legislative measures are taken.”

The proposal increases transitional housing payments for veterans experiencing homelessness, a situation that has seen a recent uptick.

The Congressional Budget Office has projected that the legislation would incur no costs for the government. Mitigating foreclosures and VA loan defaults will counterbalance increased housing grants.

Legislators are urging the VA and mortgage companies to take swift action and reach out to veterans who qualify.

Proponents of the bill stated, “We urge the VA and mortgage servicers to maintain their partnership... and assist in alleviating any challenges faced by veterans experiencing financial difficulties.”

The approval of the partial claims program is expected to provide stability for tens of thousands of military families. Many view it as a necessary correction for a framework that has neglected numerous individuals in times of economic turmoil.