Trump Signs New VA Home Loan Legislation for Veterans

WASHINGTON, D.C. — President Donald Trump signed the VA Home Loan Program Reform Act into law on Wednesday, July 24, 2025, in a move aimed at assisting veterans facing financial difficulties.

The new legislation introduces a partial claims program under the Department of Veterans’ Affairs (VA). This program allows veterans who have fallen behind on mortgage payments to add those missed payments to the end of their loans. The goal is to prevent foreclosure and to provide financial relief to veterans in distress.

This program is set to replace the Veterans Affairs Servicing Purchase (VASP) initiative that was launched in 2024 by the Biden administration. The VASP initiative had purchased delinquent VA loans from mortgage providers and subsequently adjusted those loans, offering a fixed interest rate of 2.5% for the life of the loans.

However, the VASP program faced criticism from Republican lawmakers. They argued that it was established without Congressional input and could pose risks to the overall VA home loan guarantee system, potentially costing taxpayers significantly. The VA estimated it acquired over 17,000 home loans totalizing more than $5.48 billion under the VASP program.

The House approved its version of the VA Home Loan Program Reform Act in May, followed by Senate approval in July. The House and Senate Committee on Veterans’ Affairs noted in a joint statement on July 16, “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 has been instrumental in helping veterans and their families build equity since it was established in 1944.