A New Tool for Veterans Facing Financial Hardship
On June 15, 2026, the VA formally launched the VA Partial Claim Program, a new foreclosure prevention option for veterans with VA-guaranteed home loans who have fallen behind on their mortgage.
This program has been a long time coming. FHA and USDA have had partial claim options for years. VA-backed loans have not, which left veterans with fewer tools when financial hardship hit. The VA Home Loan Reform Act, signed into law July 30, 2025, authorized this program, and it is now active.
If you or a veteran you know is behind on a VA mortgage, this is worth understanding.
How the VA Partial Claim Program Works
The program runs through your mortgage servicer, which is the company you send your payments to each month. Here is the sequence:
Step 1: Your servicer identifies you as a potential candidate. Servicers are responsible for reaching out to veterans in default who may qualify. That said, if you are behind on payments, do not wait to hear from them. Contact your servicer directly and ask about your options, including the Partial Claim Program.
Step 2: Three-month trial payment plan. Before anything is finalized, you are placed on a trial payment plan for three months. The purpose is to demonstrate that you can make your current regular payment going forward. If you complete the trial successfully, the program moves to the next step.
Step 3: Servicer brings the loan current. Once the trial is complete, the servicer pays the overdue amount on your mortgage, bringing your loan current.
Step 4: VA reimburses the servicer. VA pays that same amount back to the servicer.
Step 5: Repayment when the loan resolves. The servicer repays VA when the loan is paid in full, refinanced, or the property is sold. This amount does not add to your monthly mortgage payment.
The result for the veteran: the loan is brought current, and you continue making your regular payment going forward. The overdue balance is deferred, not forgiven, and settles when the property eventually changes hands or the loan is paid off.
How This Differs From VASP
Veterans who researched foreclosure options in 2024 and early 2025 may have come across the VA Servicing Purchase Program, or VASP. Understanding the difference between the two programs explains why the Partial Claim Program matters.
Under VASP, VA actually purchased the distressed loan from the servicer and became the new loan holder. VA then modified the loan to a fixed rate of 2.5% and the veteran made payments to VA directly. It was a significant intervention for veterans who qualified, but it came with real drawbacks. The transfer of servicing from the original servicer to VA was a lengthy process, which meant veterans waited a long time for resolution while still in default. And because VASP was designed as a last resort, veterans had to exhaust other options before they could even apply, which added more time.
Demand for VASP was high enough that the program strained under the volume. That is part of what made the case for a permanent solution that could intervene earlier in the process, before veterans reached the point where VASP was the only option left.
The Partial Claim Program is designed to be that earlier intervention. It does not require transferring the loan to VA. The servicer handles the process, which is faster. The original loan terms stay in place, including the interest rate. Most importantly, it catches veterans at a point in the default process where they still have a realistic path to staying current, rather than waiting until the situation has deteriorated further.
VASP was always a temporary emergency measure, put in place because VA loans lacked what FHA and USDA already had. The VA Home Loan Reform Act created a permanent solution. The goal is that most veterans in default will be able to resolve the situation through the Partial Claim Program before ever needing anything more drastic.
What This Program Does Not Do
It is worth being clear about what the Partial Claim Program is not.
It is not a payment reduction. Your going-forward monthly payment is based on your existing loan terms. If your payment was the reason you fell behind and nothing about your income or expenses has changed, completing the trial period and bringing the loan current does not solve the underlying affordability problem. In that case, a loan modification may be a better fit.
It is also not available to everyone in default. The trial payment plan is the qualifying step. If you cannot demonstrate the ability to make current payments for three months, the program does not proceed.
Other VA Home Retention Options
The Partial Claim Program is one of several tools VA has in place for veterans facing foreclosure. The right option depends on your situation.
Repayment Plan. If you fell behind temporarily and can now afford to pay more each month until you are caught up, a repayment plan spreads the overdue amount across future payments.
VA Traditional Loan Modification. This changes the terms of your loan, potentially extending the repayment period to lower the monthly payment. Requires lender participation.
30-Year and 40-Year Loan Modifications. Extend the loan term to reduce the monthly payment. A 40-year modification is a newer option that can meaningfully lower the payment for veterans who need the reduction to sustain homeownership.
VA Disaster Modifications. For veterans affected by a declared disaster who need temporary or permanent relief on their mortgage.
VA helped 173,000 veterans avoid foreclosure through these programs in fiscal year 2025. The Partial Claim Program adds another option to that toolkit.
What to Do If You Are Behind on Your VA Mortgage
Contact your servicer first. The Partial Claim Program and other options are administered through the company that services your loan. Your servicer is required to discuss available options with you. Call them, explain your situation, and ask specifically what home retention options are available for your loan.
If you hit a wall with your servicer, contact VA directly. Veterans who cannot reach a resolution with their servicer can call VA at 877-827-3702, option 6. VA can intervene and help facilitate the process.
Do not ignore the situation. Foreclosure moves slowly at first and then quickly. The earlier you engage with your servicer, the more options you have available.
A Note on Who Can Help With This
A mortgage broker is involved in originating loans, not servicing them. If you are behind on an existing VA mortgage, your servicer and VA directly are the right contacts, not the person who helped you close the loan.
Where a broker can help is if you reach a point where refinancing becomes the right solution, for example after you have brought the loan current through the Partial Claim Program and rates or your financial situation make a refinance worthwhile. That conversation happens later, not during the hardship period.
If you have questions about where to start or who to call, I am happy to point you in the right direction.