The VA ended its Veterans Affairs Service Purchase (VASP) on May 1.  However, three months later, President Donald Trump signed into law the VA Home Loan Program Act. 

The new legislation authorizes the VA to take certain actions for home loan defaults. It allows the federal government agency to pay the holder of a VA loan in foreclosure the amount of financing due to avoid the loan foreclosure. 

According to www.congress.gov,  the bill authorizes the VA to pay the holder of a loan guaranteed by the VA an amount necessary to avoid the foreclosure of the loan, provided that the holder of the loan and the veteran obligated on the loan execute documents to ensure the VA obtains a secured interest in the property covered by the loan. 

The bill establishes a five-year Partial Claim Program under which the VA may make a partial claim (purchase a portion of the indebtedness) on VA loans for primary residences that are in default or at imminent risk of default. Individuals who default on loans for which the VA has made a partial claim under this program must be liable to the VA for any loss resulting from the default. 

According to the National Mortgage Professional web page, “the law provides much-needed alignment between VA and other federal loan programs. The partial claim authority gives servicers a structured solution for seriously delinquent borrowers, reducing the likelihood of foreclosure while preserving the original mortgage terms. This is expected to improve both borrower retention and servicing outcomes.” 

For veterans who have a VA loan and find themselves behind on their payments due to a loss of a job, it’s essential to contact a VA loan technician at 877-827-3702.  A government customer service technician is available from 8 a.m. to 6 p.m. EST Monday through Friday.