A safety net program for providing assistance to veterans seriously behind on their home mortgage payments cleared the Senate on Tuesday, July 15, 2025, after adoption in the House. The bill is now awaiting the president’s signature. (Wikimedia Commons)
WASHINGTON — Legislation that creates a safety net for thousands of veterans facing foreclosure with delinquent home mortgages now moves to the president’s desk for his signature after passing the Senate.
The VA Home Loan Program Reform Act, which was adopted by the Senate with a voice vote late Tuesday, establishes a partial claim program that allows veterans who are behind on home loan payments to receive federal assistance.
A companion bill in the House was adopted by voice vote in May.
The bill authorizes the VA to purchase a portion of the debt on veterans loans in default or at imminent risk of default, according to the legislation.
The mortgage industry estimates more than 20,000 current borrowers are considered seriously delinquent and a partial claim program at the VA could help them retain their homes, lawmakers said. The goal is to help veterans catch up on payments and prevent foreclosure, they said.
“First, 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,” according to the bill.
Leaders from the House and Senate Veterans’ Affairs committees released a joint statement after the Senate passed the bill.
“This bipartisan and bicameral legislation will assist veterans who are facing financial hardships and provide VA with a tool to better help veterans stay in their homes and avoid foreclosure. The VA Home Loan Program provides one of the best benefits VA has to offer and has helped veterans and their families build home equity since its inception in 1944,” according to the joint statement.
The VA home loan program was created under The Servicemen’s Readjustment Act, which became known as the GI Bill. More than 3.7 million veterans hold active home loans guaranteed by the VA, according to the agency.
Sen. Jerry Moran, R-Kan., chairman of the Senate Veterans’ Affairs Committee, and Sen. Richard Blumenthal, D-Conn., the committee’s top Democrat, offered the formal remarks after Senate adoption.
On the House side, Rep. Mike Bost, R-Ill., chairman of the House Committee on Veterans’ Affairs, and Rep. Mark Takano of California, the top Democrat on the committee, included their names on the statement.
“This legislation will ensure these veterans have a viable solution to avoid defaulting on their loans, bring their mortgages current, and avoid foreclosure by establishing a replacement partial claims program,” the lawmakers said.
The partial claims program replaces the Veterans Affairs Servicing Program, which was described as a “last-resort option” for delinquent borrowers to lower their mortgage rate and make their monthly payments more affordable.
Under that program, the VA bought the mortgage from the servicer.
But the program permanently closed May 1, after Republican lawmakers complained the VA should not be in the business of buying home mortgages. They argued some veterans might intentionally fall behind on their payments to get a lower mortgage rate from the VA.
“My focus is to ensure that veterans remain in their homes whenever possible,” said Rep. Derrick Van Orden, R-Wis. “But I am concerned that this program could evolve into a financial burden of billions of dollars in bailouts that fall on the shoulders of taxpayers.”
Van Orden introduced the VA Home Loan Program Reform Act in the House for a partial claim program to allow veterans to catch up with their overdue mortgage payments while keeping the original loan.
Under the partial claim program, veterans facing financial hardship can defer missed payments without immediately facing foreclosure, Van Orden said.
The VA Home Loan Program Reform Act received support from lenders and other stakeholders, including the Mortgage Bankers Association, the National Coalition for Homeless Veterans, the Veterans of Foreign Wars and the American Legion.
“We encourage the VA and mortgage servicers to continue their collaboration as this program is implemented, ensuring that they help mitigate any impact on veterans facing financial hardship while VA takes the necessary steps to establish the new partial claims program properly,” lawmakers said in the joint statement.
