The U.S. Department of Veterans Affairs recently ended the VA Servicing Purchase (VASP) program. The program offered mortgage-rescue services. To date, it has helped approximately 20,000 veterans stay out of foreclosure and keep their houses. 

Without access to the VASP program, experts say, veterans may have fewer options than civilian homeowners if they cannot pay their mortgages on time. 

The VA Servicing Purchase Program (VASP)

Since the 1940s, the VA loan program has helped veterans purchase homes. During the COVID pandemic, the VA offered veterans the chance to pause mortgage payments via forbearance. However, an issue with the program’s design left tens of thousands of veterans at risk of losing their homes entirely. 

Veterans who enrolled in the forbearance program were told they could skip a certain number of payments, then resume making their ordinary payments. The skipped payments would be added to the end of the mortgage. Instead, veterans found themselves responsible for the entire lump sum of the missed payments. Many veterans did not have the money to make these payments and risked losing their homes.

The VA Servicing Purchase program, or VASP, sought to solve this problem. The VASP offered loan modification to veterans. Veterans received home loans with 2.5 percent interest rates, and the VA owned the loans.

The VASP program wasn’t perfect. Many veterans who had modified their loans before the VASP program launched were not eligible for assistance. However, VA officials estimate the program helped about 20,000 veterans avoid foreclosure and keep making their mortgage payments.

Effects On Veterans With the End of the VASP 

On May 1, 2025, the VA announced that the VASP would no longer accept new enrollees. Veterans who are not already enrolled in the program no longer have access to its support, including its lower interest rates. 

Approximately 33,000 VA home loans are currently in foreclosure. Another 90,000 are seriously past due. Without support from programs like the VASP, these numbers may rise.

As of early May 2025, the average US mortgage rate was just under 7 percent. This number is significantly higher than the 2.5 percent rate the VASP offered. Over the life of a mortgage, the difference amounts to tens of thousands of dollars in additional costs. Veterans living with disabilities or facing an uncertain economy may have no way to make up the difference. Foreclosure becomes a significant risk. 

Veterans’ advocates are now asking the VA to extend the program until Congress can create a new program to help veterans keep their homes. Without this support, say advocates, thousands of veterans once again risk losing their homes.

The VASP program has long had its opponents as well. Among these are several Republicans in Congress, who say the program puts too many VA assets at risk. Because the VA holds the mortgages of those enrolled in the program, the department will lose money if homeowners fall behind on mortgage payments or if the housing market takes a significant downturn, as it did in 2008. 

Rep. Derrick Van Orden (R-WI) has submitted a bill to replace VASP with another program to help veterans stay current with mortgage payments. The replacement is a “partial claim” program. It works by allowing veterans to skip one or more payments now and pay them at the end of the mortgage term instead.

Partial claim programs typically cost homeowners more in the long run. A payment moved to the end of the mortgage term collects interest until it comes due. For homeowners with 30-year mortgages, skipping one payment now could mean facing that payment with decades of collected interest down the road. However, partial claim programs can help people in the short term. 

What To Do If You’re Struggling to Secure Benefits

Veterans’ advocates, lawmakers, and others disagree on the best way to help veterans stay current on their mortgages. The end of the VASP program, however, leaves many veterans with no way to get the help they need today. These families cannot wait for lawmakers to settle on a workable compromise. 

Many veterans and their families rely on VA benefits. You may need support for serious physical or mental health issues, help with keeping your home, and other support. Proving to the VA that you qualify for benefits can be even tougher when you’re already dealing with serious challenges. 

You don’t have to fight alone. Talk to an experienced Tampa veterans attorney today. David W. Magann fights for veterans’ rights, working to secure the compensation you’ve earned. Contact us today to learn more.