Surge in Veteran Foreclosures After VA Relief Ends and Housing Plans Stall

The VA ended the Veterans Affairs Servicing Purchase (VASP) program to new applicants on May 1 2025, removing a mechanism that bought delinquent VA-backed loans and modified them at a 2.5 % fixed rate. Since then, over 10,000 veterans have lost homes, and NPR reports nearly 90,000 loans are seriously delinquent, with 33,000 already in foreclosure. The earlier COVID-era partial-claim option (2021-2022) also expired, leaving borrowers to refinance at higher market rates.

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President Donald Trump signed the VA Home Loan Program Reform Act on July 30 2025, creating a partial-claim program that can advance up to 25 % of a loan balance as a subordinate lien repaid on sale or refinance. A May 2025 executive order directed the VA to house 6,000 homeless veterans at the West Los Angeles campus by Jan 1 2028, with a 120-day action-plan deadline. The FY 2027 budget request includes $500 million for renovation, but no new housing funds were requested.

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• 2021-2022: COVID-era partial claim option introduced.

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• May 1 2025: VASP closed to new applicants.

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• May 2025: Executive order to house 6,000 veterans in Los Angeles.

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• July 30 2025: VA Home Loan Program Reform Act signed.

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• Over 10,000 veterans lost homes since May 2025.

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• Approximately 90,000 loans are seriously delinquent; 33,000 are in foreclosure.

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• VA programs saved 173,000 veterans from foreclosure in the prior year.

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Foreclosure spikes threaten veteran housing security, while the partial-claim program offers only temporary relief. Delayed Los Angeles housing leaves thousands homeless, and funding gaps raise concerns about protecting taxpayer-backed loan investments.

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A VA spokesperson said the agency typically assists 100-200 k veterans annually, that recent foreclosure numbers follow historical patterns, and that the FY 2027 budget provides resources for housing projects with a proposal request forthcoming.

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Anthony Allman, executive director of Vets Advocacy, said the housing plan “does not put the well-being of veterans first,” urging a strategy that avoids displacing current treatment-program residents.

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The VA has not quantified how many foreclosures might have been avoided under VASP, and NPR’s foreclosure figures differ from the VA’s historical comparisons, leaving the program’s full impact unclear.

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• “VA programs saved 173,000 Veterans from losing their home last year, and VA programs typically help about 100 to 200k Veterans each year.” — VA spokesperson

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• “The number of Veteran foreclosures NPR reported is in line with many recent years and is actually lower than many of those years in which VASP was not in effect.” — VA spokesperson

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• “I don’t think that plan puts the well-being of veterans first,” — Anthony Allman, executive director, Vets Advocacy

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• “VA has also been fighting to reclaim sections of the campus that were irresponsibly leased and licensed to private companies—decisions that flouted the original intent of this campus, which was to help America’s Veterans,” — VA spokesperson

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The VA will issue the housing-unit request for proposals within weeks, monitor the partial-claim program as it approaches its five-year term, and report on progress toward the 6,000-unit Los Angeles goal.

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