VA Loan Program’s End Left Thousands Facing Higher Payments
The end of a federal mortgage-relief option has left thousands of veterans paying more each month after modifying their VA-backed home loans. A review of more than 40,000 modifications made from May 2025 through September 2026 found that 63% resulted in higher payments. For comparable modifications involving Fannie Mae- and Freddie Mac-backed loans, the figure was 2%. More than 26,000 veterans saw payments increase; over 15,000 had increases of at least $150, and more than 700 faced hikes of $1,000 or more.
The Veterans Affairs Servicing Purchase program, or VASP, had allowed borrowers behind on payments to fold missed amounts into a new mortgage at a 2.5% interest rate. The Trump administration ended it on May 1, 2025. Before its closure, housing groups and mortgage-industry representatives warned lawmakers that ending the program without a workable replacement could push veterans into higher payments and foreclosure.
Scott Boyd, an Ohio veteran who lost his job and fell behind on his mortgage, now pays $1,181 more each month after his loan was modified. California Democratic Rep. Mark Takano criticized the outcome, saying veterans already facing financial distress should not be made worse off by the VA loan program. The VA said it helps veterans keep their homes or avoid foreclosure through forbearance, loan modifications and repayment plans. It also said VASP’s termination had support from many congressional leaders.
Congress later created a Partial Claim Program that moves missed payments to the end of a loan. The VA established it in June, more than 13 months after VASP ended, and lenders have been given six months to put it in place. The new program does not cover veterans whose modified loans already brought higher monthly payments. VA-loan foreclosures have reached a 10-year high.
Ending VA Mortgage Relief Left Veterans With Higher Bills
More than 26,000 veterans are paying higher monthly mortgage bills after the Trump administration ended a low-interest relief program without an immediate replacement. The figures show the cost of that choice: 63% of veterans whose VA-backed loans were modified saw payments rise, compared with 2% of borrowers with Fannie Mae- or Freddie Mac-backed loans. More than 700 veterans had increases of at least $1,000 a month.
VASP let struggling borrowers roll missed payments into a new mortgage at 2.5%. The administration ended the program on May 1, 2025, despite warnings from housing groups and mortgage-industry representatives that veterans could be left with expensive modifications and face foreclosure. Those warnings have been followed by higher payments and a 10-year high in VA-loan foreclosures.
Scott Boyd, an Ohio veteran who lost his job and fell behind on his mortgage, now pays $1,181 more each month. Rep. Mark Takano said the program should not make a combat veteran’s situation more stressful. The VA says it offers other ways to help borrowers, but those options did not prevent thousands from facing higher bills after VASP ended.
Congress created a Partial Claim Program to move missed payments to the end of a loan, but the VA did not establish it until June, more than 13 months after VASP’s closure. Lenders have six months to implement it, and it cannot assist veterans whose modified loans already carry higher payments. The delay and the gap in coverage underscore the consequences of ending relief before a replacement was ready.
VASP’s End Followed Warnings It Put VA Loans at Risk
The end of the Veterans Affairs Servicing Purchase program has been followed by higher mortgage payments for thousands of veterans, but the program itself faced Republican objections over the risks it posed to the VA home-loan system. Rep. Derrick Van Orden warned that continuing the Biden-era program could jeopardize the loan benefit for future veterans. The VA later said many congressional voices supported VASP’s termination.
The consequences are substantial: a review of more than 40,000 VA loan modifications found that 63% brought higher monthly payments. More than 26,000 veterans saw increases, including over 700 whose bills rose by at least $1,000. For Fannie Mae- and Freddie Mac-backed loan modifications, only 2% resulted in higher payments.
VASP had let borrowers move missed payments into a new mortgage at 2.5%. Mortgage and housing groups warned lawmakers against ending it before another option was available, saying modified loans at prevailing rates could become unaffordable. Scott Boyd, an Ohio veteran, now pays $1,181 more a month after a job loss and mortgage hardship. Rep. Mark Takano criticized the effects on veterans already in financial trouble.
Congress eventually established a Partial Claim Program, which shifts missed payments to the end of a loan. The VA set it up in June, more than 13 months after VASP ended, and lenders have six months to implement it. The program will not reach veterans already left with higher payments. The VA says it helps borrowers through forbearance, loan modifications and individualized repayment plans.
