The Trump administration killed the VA Servicing Purchase (VASP) program on May 1, 2025 — a Biden-era rescue program that was giving struggling veterans new mortgages at 2.5% interest rates. Since then, more than 10,000 veterans have lost their homes to foreclosure, the highest rate in a decade, with 90,000 more behind on payments or in the foreclosure process.
VASP had successfully helped 33,000+ veterans before it was killed with just one week's notice to mortgage servicers and VA staff. The reason given: “fear of the potential cost.” The program was working. The Trump VA chose to end it anyway.
The consequences are devastating. Veterans are seeing mortgage payment increases of $300-$800 per month. Elizabeth Balce of the Mortgage Bankers Association warned: “Foreclosure. Period. That's really where it's gonna come to.” Pete Mills of the MBA said the replacement proposals would leave “veterans with worse options than similarly situated non-veterans.”
One case: a Marine injured in Afghanistan with PTSD, receiving $3,971 per month in disability pay, lost his home and was offered $3,500 “cash for keys” to vacate. The VA's response to the crisis: veterans “must generally be able to make their mortgage payments.”
The VA says a replacement program is coming but it won't be operational for months. Meanwhile, veterans are losing their homes every day — not because of a market crash, but because the administration killed the program that was saving them.
Update (October 30, 2026): An NPR investigation based on previously unreported VA data it obtained found that, among veterans whose loans were modified after a financial hardship, more than 15,000 saw monthly payments rise by at least $150, and more than 700 by $1,000 or more. By NPR's analysis, 63% of veterans who received a loan modification got a payment increase, compared with 2% for modifications of Fannie Mae and Freddie Mac loans. One Ohio Army veteran, Scott Boyd, now pays $1,181 more a month, with his loan term extended to 40 years.
NPR reported that the VA took more than 13 months after ending VASP to announce its replacement Partial Claim Program, in June 2026, and gave the industry another 180 days to implement it; most mortgage companies still do not offer it, and it will not help veterans already in modified loans. Rep. Mark Takano, the committee's ranking Democrat, said, “This is the height of insanity.” VA press secretary Quinn Slaven said in a statement that “many leading voices in Congress supported the termination of VASP, which put the entire VA home loan program at risk.”