VA Launched a New Foreclosure Tool — But 10,000+ Veterans Already Lost Their Homes

Table of Contents

• What Happened Between VASP and Now
• The Human Cost: 10,000 — or More — Veterans Lost Their Homes
• What the VA Partial Claim Program Does
• How a Partial Claim Works in Practice
• The November 28 Servicer Deadline — and Why It Matters Now
• What This Program Does Not Do
• What To Do If You Are Behind on Your VA Loan
• Frequently Asked Questions

The Department of Veterans Affairs launched a new foreclosure-prevention tool on June 15, 2026, giving veterans with VA-backed mortgages a path to bring delinquent loans current without refinancing into a higher interest rate. The program, called the VA Partial Claim Program, is the first meaningful replacement for the VA Servicing Purchase program — known as VASP — since that program was shut down in May 2025.

The gap between those two programs was not cost-free. In the roughly 13 months between VASP’s cancellation and this program’s launch, data from ICE Mortgage Technology shows more than 10,000 veterans lost their homes to foreclosure sales, with an additional 90,000 still behind on payments or actively in the foreclosure process. For anyone in that pipeline today, the new program represents a genuine option — but accessing it depends on when your specific servicer has built the capability to process it.

We covered the VASP cancellation and its early impact in detail in April. Read that report here. This article focuses on what the new program does, how it works, and what veterans need to do right now.

What Happened Between VASP and Now

VASP was a VA mortgage rescue program that gave veterans who had fallen behind on their loans a restructured mortgage at a 2.5% interest rate. It was designed largely to help veterans who had used COVID-era forbearance in good faith and then found themselves facing lump-sum repayment demands or loan modifications at rates three times higher than their original loans. By early 2025, more than 33,000 veterans had received modified loans through VASP.

The VA shut the program down on May 1, 2025, with roughly one week’s notice to servicers. No replacement was ready. Veterans who had applied but not yet been enrolled were cut off entirely.

Congress moved to address the gap. The VA Home Loan Program Reform Act was signed into law on July 30, 2025, authorizing the VA to create a partial claim mechanism. The VA updated its Servicer Handbook in June 2026, and the program opened for submissions on June 15, 2026.

The Human Cost: 10,000 — or More — Veterans Lost Their Homes

The figure most widely cited in news coverage comes from ICE Mortgage Technology, which tracks mortgage industry data nationwide. An NPR investigation using that data found more than 10,000 veterans lost their homes through completed foreclosure sales between the end of VASP and April 2026 — with another 90,000 behind on payments or somewhere in the foreclosure process at that time.

Rep. Ted Lieu (D-CA) has put the total higher. In a public statement, Lieu cited a figure of more than 15,000 veteran home losses since the cancellation of VASP. His office has not published the methodology behind that figure, and the VA has not confirmed it. The 10,000-plus figure from ICE Mortgage Technology remains the figure most consistently cited by independent reporting.

The range — somewhere between 10,000 and 15,000 — represents real families, many of them combat veterans, veterans rated for service-connected disabilities, and families who entered forbearance during the pandemic under the reasonable assumption that the program would protect them.

The American Bankers Association, which represents mortgage servicers, had raised concerns about the gap between programs before the new one launched. In correspondence with the VA, the ABA recommended that the agency request a foreclosure pause from servicers while the new framework was being finalized. That moratorium was not implemented.

What the VA Partial Claim Program Does

The Partial Claim Program gives veterans behind on their VA loans a mechanism to bring the loan current without changing the interest rate or monthly payment on their existing mortgage. The core mechanic works like this:

• The veteran first completes a three-month trial payment plan, making three on-time payments at the existing rate.
• After successful completion, the mortgage servicer advances the funds needed to cover the missed payments — catching the loan up entirely.
• The VA reimburses the servicer for those advanced funds.
• The veteran signs a subordinate lien — a second legal claim against the home — in the amount of the advance. That lien carries no interest and requires no monthly payment.
• The balance on the subordinate lien is repaid when the veteran sells the home, refinances, or pays off the first mortgage.

The advance can cover up to 25% of the unpaid principal balance on the first mortgage. For payments missed during the COVID-era forbearance window — March 1, 2020 through May 1, 2025 — the ceiling rises to 30%. The advance may also cover past-due property taxes, homeowners insurance, and HOA dues in addition to missed principal and interest.

The partial claim sits at step five in the VA’s loss mitigation waterfall — the ordered sequence of options a servicer must evaluate before it can move toward foreclosure. This placement means a veteran who qualifies should be offered the partial claim before a servicer can pursue other options, including a loan modification that might raise the monthly payment.

How a Partial Claim Works in Practice

An example helps clarify what this looks like in real terms. Suppose a veteran is $14,000 behind on a VA loan with a $300,000 outstanding balance. The 25% ceiling means up to $75,000 is available, so the arrearage fits easily within the program limits.

After completing three on-time trial payments, the servicer advances $14,000 to bring the loan current. The veteran’s original interest rate and monthly payment are preserved. The veteran now carries a $14,000 zero-interest second lien to the VA — no monthly payment, no interest accruing. When the home is eventually sold or the first mortgage is refinanced, that $14,000 is repaid from the proceeds.

The debt did not disappear. It moved to a position where it stops growing and doesn’t affect the monthly budget. That distinction matters for veterans who may want to sell or refinance in the future — the subordinate lien must be accounted for in any equity calculation and may complicate certain refinance options, including the VA IRRRL streamline refinance.

The November 28 Servicer Deadline — and Why It Matters Now

One of the most important practical details about this program is the gap between the launch date and the compliance deadline. Servicers were permitted to begin submitting partial claims on June 15, 2026, but they are not required to have the capability fully built until November 28, 2026.

That means a veteran who calls their servicer today may be told the program isn’t available yet — not because the veteran is ineligible, but because that specific servicer hasn’t finished the technical work. A denial in August 2026 is not the same as a permanent disqualification.

If you receive a vague or negative response from your servicer before November 28, the rest of the VA’s loss mitigation waterfall still applies. Forbearance, repayment plans, and loan modifications remain available options while the partial claim capability is being built out. Ask your servicer specifically which loss mitigation options are being evaluated for your loan right now, and request that information in writing.

VA loan technicians can also engage with your servicer directly on your behalf. They can be reached at 877-827-3702, option 6, Monday through Friday, 8 a.m. to 6 p.m. Eastern time.

What This Program Does Not Do

The partial claim is a significant improvement over the gap period, but it has real limitations that veterans should understand before assuming it resolves their situation.

It does not forgive the debt. The subordinate lien is real and must eventually be repaid. Veterans who plan to sell their home or refinance should factor that balance into their equity math.

It does not help veterans who already accepted higher-rate modifications. Veterans who were forced to accept loan modifications after VASP ended — sometimes seeing their monthly payments increase by hundreds of dollars — are not eligible for relief under this program as currently written. Their only path to a lower payment is a future refinance if rates decline enough to make that viable.

It does not automatically stop foreclosure. If your loan is already in active foreclosure, the clock continues running. Call the VA and a HUD-approved housing counselor immediately rather than waiting to see if your servicer contacts you.

It is not a permanent fix if the underlying payment is unaffordable. The partial claim cures the arrears but leaves the existing mortgage payment in place. If the payment itself was the problem — not a temporary hardship — a loan modification that restructures the loan terms may still be the appropriate tool. Ask your servicer to evaluate all options across the full loss mitigation waterfall.

What To Do If You Are Behind on Your VA Loan

If you have a VA-backed mortgage and you are behind on payments — or worried you soon will be — take these steps now rather than waiting for your servicer to contact you.

• Call the VA loan technician line: 877-827-3702, option 6. VA loan technicians can discuss your options directly and can contact your servicer on your behalf. Hours are Monday through Friday, 8 a.m. to 6 p.m. Eastern. You can also find resources at benefits.va.gov/homeloans.
• Contact a HUD-approved housing counselor. Free or low-cost foreclosure prevention counseling is available through HUD-certified agencies. Find one at hud.gov/counseling.
• Contact your servicer’s loss mitigation department in writing. Ask which specific loss mitigation options are being evaluated for your loan and where you stand in the waterfall. Request everything in writing.
• Ask specifically about the Partial Claim Program. Mention June 15, 2026 by name. If your servicer says it isn’t available yet, ask for the date they expect to be compliant and what options apply to you in the interim.
• Contact a veteran service organization. Groups like the Veterans of Foreign Wars (VFW) and the American Legion can connect you with advocates who may be able to assist or refer you to local legal resources.
• If you’ve already received a foreclosure notice, act today. The foreclosure timeline does not pause while you wait for an answer. Legal assistance is available through JAG offices on military installations and through nonprofit legal organizations.

Frequently Asked Questions

This article is provided by Military.net, an independent educational resource. We are not affiliated with the Department of Defense, the VA, or any government agency. For official benefit information, visit benefits.va.gov/homeloans or contact your local VA regional loan center.