House Passes Legislation to Strengthen VA Loan Foreclosure Protections

jonathan
Jonathan V June 5
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House Passes Legislation to Strengthen VA Loan Foreclosure Protections

A new legislative step aimed at supporting U.S. veterans facing mortgage challenges is making headlines. The House of Representatives has passed HR 1815, officially titled the VA Home Loan Program Reform Act, which introduces stronger safeguards against foreclosure for veterans with VA-backed home loans.

Spearheaded by Rep. Derrick Van Orden of Wisconsin, the bill proposes the creation of a Partial Claim Program a federal relief mechanism that would enable the Department of Veterans Affairs (VA) to step in and cover overdue loan payments, helping eligible veterans avoid foreclosure and keep their homes.

A Lifeline for Struggling Veteran Homeowners

Under the proposed bill, veterans who fall behind on their VA mortgage payments would have the chance to bring their loans current through a partial claim, similar to an assistance model previously used by the Federal Housing Administration (FHA). This program allows missed payments to be deferred and repaid later typically when the loan is paid off without accruing interest.

“This bill gives us a real opportunity to protect veterans and their families from losing their homes,” said Rep. Van Orden. “It’s not just about fixing a broken system it’s about creating a lasting, reliable safety net.”

In addition to the new claim program, HR 1815 would also temporarily boost funding for the VA’s Grant and Per Diem Program, which supports transitional housing efforts through partnerships with local organizations.

Filling the Gap Left by VASP’s Expiration

The need for this legislation intensified after the expiration of the Veterans Affairs Servicing Purchase (VASP) program on May 1, 2025. VASP, launched in May 2024, had provided distressed borrowers with a consistent 2.5% fixed mortgage rate often their last line of defense against foreclosure.

However, the VA officially ended VASP submissions as of April 30, and with its closure, veterans lost a key tool for avoiding foreclosure during financial hardship.

“The Biden administration made a critical error with VASP, and it’s clear we needed a better alternative,” said Rep. Mike Bost, Chairman of the House Veterans’ Affairs Committee. “This new bill provides the right fix, and it’s built on fiscal responsibility and real compassion.”

The Numbers Tell the Story

The urgency for a replacement program is evident. According to NPR, nearly 90,000 VA-backed loans are now seriously delinquent, with 33,000 already in foreclosure. As of April 1, 2025, 75,000 veteran borrowers were behind by three or more payments. Of those, only 17,000 had been approved for VASP assistance before it was terminated.

Veterans’ advocates say a more permanent and structured solution is needed fast.

“Veteran homeowners are at real risk,” said Bob Broeksmit, President and CEO of the Mortgage Bankers Association (MBA). “HR 1815 gives VA the permanent authority to offer a partial claim option, aligning it with other federal housing agencies and ensuring veterans aren’t left behind.”

Looking Ahead

The bill now heads to the Senate, where bipartisan support will be critical to moving it forward. Lawmakers and housing advocates alike are pushing for swift approval and implementation, warning that thousands of veterans remain vulnerable to foreclosure without an active relief framework in place.

HR 1815 builds on earlier VA hardship programs used during the pandemic, which allowed delinquent borrowers to defer missed payments to the end of their loan term without interest. These partial claims were effective and low-cost, allowing veterans to stabilize without refinancing or selling their homes.

If passed in the Senate and signed into law, this new measure would make the partial claim approach permanent, providing long-term stability and protection for those who’ve served the country.

Bottom Line:


With foreclosure risks rising for veteran homeowners, the VA Home Loan Program Reform Act could be a vital solution. By reviving and improving upon previous assistance programs, this legislation aims to ensure that veterans have access to sustainable housing support when they need it most. For more learn about finance visit Nadlan Capital Group.

Categories: English Real Estate News
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