On May 19, the House of Representatives passed H.R. 1815, the VA Home Loan Program Reform Act. If made into law, the legislation would allow the VA to create a permanent partial claims program to help Veteran homeowners catch up on missed mortgage payments. It also includes updated funding levels for the VA’s Grant and Per Diem program, which supports services for Veterans experiencing homelessness.
The bill follows the recent termination of the Veterans Affairs Servicing Purchase, or VASP, program. Introduced by the Biden administration as a pandemic-era emergency fix, VASP allowed the VA to purchase delinquent loans and offer borrowers a fixed 2.5 percent interest rate. Since May 2024, the VA has acquired over 17,000 loans worth about $5.5 billion. While the program helped thousands of Veterans stay in their homes, some lawmakers criticized it for its high cost and for expanding the VA’s role beyond its traditional responsibilities.
Republican lawmakers, including House Committee on Veterans’ Affairs Chairman Mike Bost (R-Ill.) and Economic Opportunity Subcommittee Chairman Derrick Van Orden (R-WI), argued that the VASP program was financially unsustainable. They said it attempted to solve relatively small mortgage delinquencies by purchasing entire loans at significantly higher costs to taxpayers. Bost and Van Orden introduced H.R. 1815 as an alternative they believe will be more cost-effective and better aligned with the VA’s mission.
“This is a fiscally responsible solution to ensure that Veterans in financial hardship have access to the tools they need to stay in their homes,” said Bost.
Industry leaders and advocacy groups have expressed strong support for the bill. Bob Broeksmit, president and CEO of the Mortgage Bankers Association, said the legislation fills a critical gap left when the previous partial claims program ended. Rocket Mortgage said the bill gives the VA a sustainable way to support Veterans and mortgage servicers. Kathryn Monet of the National Coalition for Homeless Veterans said swift passage in the Senate is essential to avoid harm to Veterans facing housing crises.
Rep. Mark Takano (D-Calif.), the ranking Democrat on the House Veterans Affairs Committee, supports the bill but criticized the decision to end VASP before an alternative was ready. He said up to 80,000 Veterans are now at risk of foreclosure and called on the administration to provide interim relief until the new program is implemented.
VA Press Secretary Peter Kasperowicz said the agency is not structured to act as a mortgage servicer and that ending VASP was necessary to protect funding for other services. Veterans enrolled in VASP before May 1 will not be affected by the program’s closure.
The Congressional Budget Office projects the new partial claims program could save the government around $170 million over ten years by reducing costs related to loan defaults. Supporters of the bill are urging the Senate to pass it quickly to protect Veterans from losing their homes.
Author: Rikki Almanza
Rikki is a Web Content Coordinator for the American Legion, Department of California. With a deep-rooted connection to the military, a spouse who is a Navy veteran, a father who served in the Air Force for 25 years, and a grandfather who proudly served, Rikki is committed to using her skills and knowledge to provide valuable assistance and resources to servicemembers and veterans.
