VA ended loan help, leaving veterans with higher bills
Thousands of veterans face steep payment increases after the department shut down the VASP program in 2025.
By Dominic Foster ·
The Department of Veterans Affairs ended its Veterans Affairs Servicing Purchase program on May 1, 2025. That action left thousands of service members without a low-interest option to handle missed mortgage payments. Many were forced into loan modifications that raised their monthly costs.
According to data obtained by NPR, more than 15,000 veterans saw their monthly mortgage payments rise by at least $150. More than 700 veterans faced increases of $1,000 or more. For 63% of veterans who received a loan modification, the payment went up. That figure stands in contrast to the 2% of borrowers in Fannie Mae and Freddie Mac loans who saw increases after modifications.
Scott Boyd, a veteran living near Columbus, Ohio, experienced this shift firsthand. He lost his job in 2024 and struggled with PTSD. His lender told him the VA forbearance program would help him catch up. That program no longer exists. Boyd signed a modification that raised his interest rate from 2.75% to 6.75%. His monthly payment increased by $1,181, and his loan term extended to 40 years.
Rep. Mark Takano, a Democrat from California and ranking member of the House Veterans' Affairs Committee, called the situation the height of insanity. He noted that these veterans are already financially distressed. Rep. Mike Bost, the Republican chairman of the committee, did not respond to requests for comment. He had previously warned that the program was a liability for taxpayers.
The VA created a replacement option called the Partial Claim Program. Congress passed a bill supporting this new program quickly. It allows veterans to move missed payments to the end of their loan term rather than raising their interest rate. However, the VA took more than 13 months to announce the details. Lenders were given 180 days to implement the change. Most mortgage companies have not yet offered the program to borrowers.
Scott Boyd signed his modification two weeks before the VA launched the new program. The first mortgage company did not offer veterans access to the Partial Claim Program for two more months. The VA gave lenders a deadline of Nov. 28 to fully stand up the program. Foreclosures on VA loans rose to a 10-year high after the VASP program ended, according to industry data. The VA stated that it helps veterans retain homeownership through various assistance programs.
