The Senate unanimously passed the bipartisan VA Home Loan Program Reform Act on Wednesday, sending legislation to President Donald Trump’s desk that would create a safety net for veterans who are late on their mortgage payments.
The bill, which passed in the House on May 19, establishes a partial claims program for veteran borrowers experiencing financial hardship, meaning the delinquent portion of a loan backed by the U.S. Department of Veteran Affairs (VA) would be moved to the back end of the loan term and would be interest-free, giving the borrower five years to catch up on missed payments.
The legislation serves as a replacement for the Veterans Affairs Servicing Purchase (VASP) Program. That mortgage assistance program for veterans — which involved the VA purchasing delinquent loans and modifying them with more manageable terms — abruptly stopped accepting submissions on May 1.
Rep. Derrick Van Orden, R-Wis., who sponsored the bill in the House, had criticized the VASP program, claiming it endangered the broader VA Home Loan Program through the VA’s acquisition of risky loans. Van Orden took a parting shot at the VASP program in a statement issued after the Senate passed the replacement legislation.
“Under the Biden administration, the VA created the VASP program without consulting Congress, costing the American taxpayers $5.8 billion and endangering the entire VA home loan guarantee program,” Van Orden stated. “The time for faceless bureaucrats to run roughshod over elected officials is over. My bill offers a real solution to help every servicemember and veteran maintain the American Dream of homeownership.”
A bipartisan group of U.S. representatives and senators — including Sen. Jerry Moran, Sen. Richard Blumenthal, Rep. Mike Bost and Rep. Mark Takano — released a joint statement Wednesday noting that the legislation also provides support for homeless veterans.
“Today, we are empowering VA to establish a partial claim program as an option of last resort, which will preserve veteran homeownership and save taxpayer dollars by avoiding preventable foreclosures,” the joint statement read. “This legislation will also allow VA to provide critical funding to grantees offering transitional housing to homeless veterans through the Grant and Per Diem program.”
The Mortgage Bankers Association (MBA), which had previously expressed support for the Van Orden-sponsored bill, also praised the Senate’s move.
“MBA applauds the Senate for taking swift bipartisan action to support veterans at risk of foreclosure by passing the VA Home Loan Program Reform Act,” MBA President and CEO Bob Broeksmit stated. He added that the legislation is a “critical step forward in ensuring that distressed veteran homeowners have access to a proven and sustainable loss mitigation solution.”
National Association of Mortgage Brokers (NAMB) President Jim Nabors, who met with lawmakers in May to advocate for the bill’s passage, also applauded the affirmative vote in a statement provided to Scotsman Guide.
“NAMB remains deeply committed to addressing the needs of our nation’s veterans, particularly those who became delinquent on their home loans during the COVID-19 pandemic,” Nabors stated. “We are sincerely grateful to members of Congress for crafting a unanimous, bipartisan bill that delivers much-needed relief to those who have served our country.”
