Trump signs new law helping veterans avoid foreclosure with partial claims payment program

President Donald Trump signed the VA Home Loan Program Reform Act into law Wednesday, cementing a partial claims program aimed at preventing veterans from losing their homes to foreclosure. 

The new partial claims program under the Department of Veterans' Affairs' (VA) Home Loan Program will allow veterans who are late on mortgage payments to tack on those payments to the tail end of their loans. 

Additionally, the partial claims program seeks to replace the Veterans Affairs Servicing Purchase (VASP) program created in 2024 under the Biden administration, but that the Trump administration nixed in May. 

Under the VASP program, the VA bought up delinquent VA loans from mortgage servicers, adjusted the loans and then offered borrowers a fixed 2.5% interest rate for the duration of the loan. 

But the VASP program faced scrutiny from Republicans, who decried that it was established without input from Congress and claimed it jeopardized the entire VA home loan guarantee program and would be costly for taxpayers. Altogether, the VA estimated that it purchased more than 17,000 home loans totaling more than $5.48 billion dollars under VASP. 

The House passed its version of the VA Home Loan Program Reform Act in May, while the Senate passed its version of the measure in July. 

"This bipartisan and bicameral legislation will assist veterans who are facing financial hardships and provide VA with a tool to better help veterans stay in their homes and avoid foreclosure. The VA Home Loan Program provides one of the best benefits VA has to offer, and has helped veterans and their families build home equity since its inception in 1944," House and Senate Committee on Veterans’ Affairs leaders said in a joint statement on July 16. 

This is a breaking news story and will be updated.