Housing counselor Rachael Hite says that VA loan holders who are having challenges paying their mortgages are losing a mortgage rescue and restructure plan called VASP.
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In another setback for veterans facing steep mortgage pain, the Veterans Administration has ended its Veterans Affairs Servicing Purchase Program (VASP), a move that may affect tens of thousands of struggling veterans in an already stressed economy. Many veterans who hold a VA loan are disabled, seniors or a combination of both.
According to the U.S. Department of Labor, in 2023, there were 8.1 million veterans aged 65 and older in the United States, representing approximately 49 percent of the total veteran population. Additionally, 5.2 million veterans had a service-connected disability, which is roughly 30 percent of all veterans.
So far, VASP estimates that it has helped veterans save about 20,000 homes. The ending of this program comes at a time when analytics firm Intercontinental Exchange (ICE) reports that about 90,000 veterans are behind on their mortgage payments. Of those 90,000, 33,000 are at risk of foreclosure.
Alys Cohen, senior attorney at the National Consumer Law Center, commented, saying:
“The cancellation of the VASP mortgage assistance program for veteran borrowers puts tens of thousands of veterans and their families with VA home loans at great risk of losing their homes,” said “The VA Home Loan Program is a benefit that veterans have earned through service and sacrifice — it is meant to give them housing stability they deserve.”
Why was the program cut?
- Focus on core mission: The VA stated that the decision to end VASP reflects a need to focus on its core mission, which is the VA home loan guaranty. They believe they are not structured to act as a mortgage loan restructuring service.
- Taxpayer money concerns: Some Republicans in Congress have expressed concern that the VASP program put too much taxpayer money at risk, as the VA bought up troubled loans and held them on its own books. They worry about the potential cost of the program, with VA Secretary Doug Collins stating it would cost “multiple billions of dollars” going forward.
The VA did say they are committed to helping veterans with their mortgage issues, but only offered details of the “Wind Down” in a somewhat complex release in April.
What actions can you take?
Here’s what veterans should do now: If you’re in VASP, keep up with your loan servicer. If not, explore alternatives, such as repayment plans, forbearance or loan modification. And don’t wait: Foreclosure rates are rising, especially among VA‑backed home loans.
Contact the foreclosure attorney and your local representatives to see if they can help delay or postpone the foreclosure on your behalf.
Hot tip: We have linked the “buyers” guide from the VA for research for agents. Make sure that your new clients or return VA clients are working with a trusted VA mortgage provider to help navigate through the process so that they have the best experience possible.
Resources you need:
On a personal advocacy level, you can reach out to your state and federal representatives to let them know how this impacts homeownership and the lives of our veterans, as well as your commitment, as a Realtor, to helping individuals become and stay homeowners.
Rachael Hite is a seasoned housing counselor and thought leader in the real estate industry. Connect with her on Instagram and LinkedIn.
