New VA Home Loan Reform Offers Big Relief for Veterans Facing Mortgage Challenges

On July 30, 2025, the VA Home Loan Program Reform Act (H.R. 1815) was signed into law, bringing several important updates to the Department of Veterans Affairs (VA) mortgage servicing program. These changes are designed to provide more support to veterans navigating financial hardship and ensure the VA’s tools are on par with other federal housing programs.

Here are the key highlights of the new law:

✅ Permanent Partial Claim Program

The VA now has the authority to advance funds to help cover missed mortgage payments for borrowers who are seriously delinquent. These advances become subordinate liens—meaning they don’t interfere with the existing mortgage terms—and give borrowers a chance to catch up without refinancing or modifying their loan. This replaces the temporary Veterans Affairs Servicing

Purchase (VASP) program, which ended in May 2025, and closely mirrors existing programs from FHA and USDA.

⚖️ Parity with Other Federal Loan Programs

With this reform, VA borrowers now have access to the same loss mitigation tools and consumer protections available to FHA loan holders. This ensures a more level playing field when it comes to mortgage servicing and foreclosure prevention.

🔧 Improved Loss Mitigation Options

The law modernizes the VA’s approach to helping veterans avoid foreclosure, especially in cases where high interest rates or economic hardship have made monthly payments unaffordable. The updates streamline the process and give servicers more tools to keep veterans in their homes.

🏡 Real Estate Agent Commission Clarification

The Act also confirms that veterans may pay their real estate agents directly, clearing up confusion and giving VA buyers more flexibility and a stronger position when competing with conventional offers.

📆 Retroactive Relief Available

Importantly, the new partial claim option can be applied retroactively to loans affected by financial hardship between March 2020 and May 2025. This opens the door for many veterans who were previously left without viable recovery options.

Bottom LineThis reform is a significant win for veterans, especially those struggling to stay current on their mortgages. By expanding available tools, aligning with other federal programs, and offering retroactive relief, the VA is giving borrowers more pathways to avoid foreclosure and keep their homes.

If you’re a veteran facing mortgage challenges—or just want to understand how these updates might apply to you—reach out anytime. I’m happy to walk you through your options.