VA Home Loan Program Reform Act
Congress Passes VA Home Loan Program Reform Act to Help Veterans Avoid Foreclosure
This bill has finished the legislative process and is now a law. It was signed into effect on July 30, 2025. There are no further actions scheduled for this bill.
Passage Likelihood
Legislative Progress
Key Points
- The VA can now create a "Partial Claim Program" to buy a portion of a veteran's mortgage debt to prevent foreclosure. The government can pay up to 25% of the unpaid loan balance, or up to 30% for veterans who missed payments between March 2020 and May 2025 during the pandemic period.
From policy text
“the amount of a partial claim under this section with respect to a loan guaranteed described in subsection (a) may not exceed 25 percent of the unpaid principal balance of the loan on the date on which the partial claim is made”
View in full text - Mortgage lenders must now follow a mandatory sequence of loss mitigation steps before they can foreclose on a VA-guaranteed home loan. The VA cannot buy out the entire loan until the veteran has gone through every available option to keep their home.
From policy text
“The Secretary shall prescribe loss mitigation procedures, including a mandatory sequence in which the holder of a loan guaranteed under this chapter shall offer loss mitigation options”
View in full text - The law increases funding for comprehensive service programs that help homeless veterans, authorizing $344 million per year for fiscal years 2025 and 2026, then $257.7 million annually through 2030.
- The VA must develop and submit a strategy within 90 days to make sure veterans using VA home loans are not at a disadvantage when trying to hire a real estate agent or broker. This responds to concerns that recent changes in the real estate industry could hurt VA borrowers' ability to compete in the housing market.
From policy text
“the Secretary of Veterans Affairs shall submit to the Committees on Veterans' Affairs of the Senate and House of Representatives a report on the strategy of the Secretary to ensure that a veteran who seeks to purchase a home with a loan guaranteed under chapter 37 of title 38, United States Code, is not at a disadvantage when attempting to secure representation by a real estate agent or broker”
View in full text - Veterans who default on a partial claim loan will be personally liable to the government for any losses. The VA can also reduce their future home loan entitlement, making it harder to use VA loan benefits again.
From policy text
“an individual who defaults on a loan for which the Secretary makes a partial claim made under this section shall be liable to the Secretary for any loss suffered by the Secretary resulting from such default”
View in full text
Impact Analysis
Personal Impact
Milestones
Became Public Law No: 119-31.
The President signed it. This is now the law of the land.
Signed by President.
The President signed it. This is now the law of the land.
Presented to President.
Both chambers passed identical text. The President has 10 days to sign it into law or veto it.
Message on Senate action sent to the House.
Passed Senate without amendment by Voice Vote. (consideration: CR S4373-4374)
The Senate voted to approve this bill. If the House already passed it, it goes to the President.
Related News
7 articles
New mortgage support program for struggling veterans set to become law
Senate lawmakers finalized plans for the VA Home Loan Program Reform Act, creating a partial claim program for veterans who have fallen behind on housing payments. The bill empowers the VA to purchase a portion of defaulted loans as an option of last resort to preserve homeownership.
Trump signs VA foreclosure prevention bill into law
The VA Home Loan Program Reform Act adds a permanent partial claim option to the VA mortgage program. This follows the termination of the VASP program in May and aims to provide a sustainable solution for the nearly 90,000 VA loans currently in serious delinquency.
New law seeks to help veterans struggling with homeownership
The newly enacted VA Home Loan Program Reform Act (H.R. 1815) authorizes the VA to pay loan holders amounts necessary to avoid foreclosure. It establishes a five-year Partial Claim Program and requires the VA to ensure veterans are not disadvantaged when paying real estate agent fees.
Source Information
Document Type
Congressional Bill
Official Title
VA Home Loan Program Reform Act
Data Sources
Sponsor
Analysis generated by AI. Always verify with official sources.