Without VASP, veterans don’t have a foreclosure safety net

There are about 80,000 veterans in the U.S. who are behind on their mortgages and heading toward foreclosure, according to data from ICE Mortgage Technology, a number that could have been alleviated with help from the Veteran Affairs Servicing Purchase (VASP) program.

But just last month, the program was abruptly discontinued by the U.S. Department of Veterans Affairs (VA) when it stopped accepting new applicants on May 1.

VASP was started in 2024 under the Biden administration with the purpose of being a last-resort program that offered new, low-interest rate mortgages for veterans and service members who fell behind on their loans. According to the VA, the widely criticized program helped more than 33,000 veterans during the past year.

Now, as VASP has no backup and mortgage rates remain near 7%, the only other option besides VASP is to take out a loan modification, which could mean increased payments that put veterans in foreclosure and force them to sell.

Fannie Mae, Freddie Mac and Federal Housing Administration mortgages all have emergency options for delinquent borrowers that don’t involve an increased interest rate or monthly payment.

NPR reported Thursday that it has heard from more than 50 veterans around the country in recent weeks who are upset about the program’s defunding. The news organization collected personal anecdotes from Republican and Democratic veterans and lawmakers — all of whom are concerned about the lack of options.

“I’m constantly terrified every day that some giant moving truck or some people are just gonna show up on the front door and kick us out and start throwing all of our stuff out of the house,” Mason Reale, a former U.S. Navy sonar technician in Lake Wales, Florida, told NPR.

VA Secretary Doug Collins raised concerns about VASP, arguing that it exposed taxpayers to too much risk because the VA holds the new loans directly on its balance sheet.

At a recent hearing, NPR reported that Collins said the program was going to cost “multiple billions of dollars” going forward. He also remarked that “it’s a program we should have never gotten into.”

Collins shared his hopes that Congress will replace VASP with a “partial claim” program, which moves missed payments to the end of the loan term, allowing borrowers to resume paying their mortgage at the original rate and amount. The VA used to have this option, but it was shut down in 2022.

Congress is working on a new VA home loan safety net, although it’s unclear how long it will take to implement. In May, H.R. 1815 — the V.A. Home Loan Program Reform Act — was passed by voice vote in the House of Representatives.

The Hill reported on June 11 that House Republicans advanced legislation that calls for more than $450 billion to fund the VA, military construction and other programs for fiscal year 2026.