- The VA Home Loan Program Reform Act created new foreclosure-prevention tools to help more Veterans stay in their homes.
- The law replaces temporary assistance options like VASP with a longer-term partial claim program and updated loss mitigation standards.
- VA loan eligibility requirements have not changed, but the rollout of some borrower assistance programs is still evolving.
The VA loan remains one of the most valuable homebuying benefits available. From no down payment requirements to competitive interest rates, the program has helped millions of Veterans become homeowners.
But today’s housing market has created new challenges for buyers and homeowners alike. Higher home prices, rising monthly payments and financial hardship have left some Veteran homeowners struggling to keep up with their mortgages.
That's the problem the VA Home Loan Reform Act was designed to address. The legislation aims to strengthen borrower protections, modernize parts of the VA loan program and help ensure the benefit continues supporting Veterans and military families for generations to come.
What is the VA Home Loan Program Reform Act?
The VA Home Loan Reform Act is a federal law known as H.R. 1815 that was signed into law on July 30, 2025. The legislation updates portions of the VA home loan system, particularly around foreclosure prevention and borrower assistance.
The VA Home Loan Program Reform Act was enacted to modernize how the VA handles delinquent loans and to provide stronger protections for Veterans facing financial hardship. One of the biggest changes is the transition away from temporary pandemic-era solutions, including the Veterans Affairs Servicing Purchase (VASP) program, toward a new long-term partial claim structure.
The law also directs the VA to expand and standardize foreclosure prevention efforts so struggling borrowers can access assistance sooner and more consistently.
While the law is currently in effect, some details are still developing. The VA continues to release guidance and draft servicing policies tied to implementation, which means aspects of the VA home loan reform rollout could continue to evolve over time.
Have questions? Connect with a trusted VA-lending specialist
VA Partial Claim Program
One of the most important changes in the VA Home Loan Act is the creation of a VA partial claim program designed to help Veterans avoid foreclosure. Under this structure, the VA may advance funds to bring a delinquent mortgage current.
Instead of forcing borrowers into an immediate refinance or foreclosure process, the program allows eligible homeowners to resume their regular mortgage payments. In many cases, the partial claim may cover roughly 25% to 30% of the unpaid principal balance, although the exact amount can vary depending on the situation.
The assistance creates a separate subordinate lien attached to the property. In most cases, this balance does not accrue interest, and repayment is deferred until:
- The home is sold
- The mortgage is refinanced
- The original loan is fully paid off
This structure is similar to foreclosure prevention programs already used by other major government-backed loan programs.
Before you can receive a partial claim, you'll need to make three consecutive on-time mortgage payments through a trial payment plan. Contact your mortgage servicer to get started with the Partial Claim Program.
Mortgage servicers have until November 28, 2026, to add partial claims to their systems.
The partial claim option may also work alongside other loss mitigation tools, including:
- Repayment plans
- Loan modifications
- Payment deferrals
The overall goal is to help more Veterans stay in their homes while recovering from temporary financial hardship.
Foreclosure Prevention Improvements
The VA Home Loan Reform Act also introduces more standardized foreclosure prevention procedures. Historically, borrower assistance options sometimes varied between loan servicers.
The updated framework creates a more consistent “waterfall” approach to loss mitigation, which means servicers must evaluate borrowers through a series of retention options before moving toward foreclosure.
The changes help align VA loan servicing practices more closely with guidelines for other loan programs, including FHA loans, USDA loans and conventional loans.
The reform places a stronger emphasis on early intervention and home retention. Depending on the borrower’s situation, servicers may evaluate options such as:
- Payment deferrals
- Loan modifications
- Partial claims
- Repayment arrangements
The new standards are intended to reduce inconsistencies between servicers while helping struggling homeowners access assistance faster.
Buyer Agent Compensation Rule
Another important shift tied to broader VA home loan reform efforts involves buyer agent compensation. The VA now allows Veterans using VA loans to directly pay for buyer agent representation when needed. This change became especially important after changes to real estate commission practices following the National Association of Realtors (NAR) settlement.
Previously, some fee restrictions created uncertainty around how Veterans could compensate their agents. The updated policy gives VA buyers greater flexibility and helps them remain competitive in markets where sellers are no longer offering buyer-agent commissions.
This change may help Veterans:
- Compete more effectively in low-inventory markets
- Negotiate compensation directly with agents
- Access professional representation more easily
- Avoid disadvantages compared to conventional buyers
For many military buyers navigating fast-moving housing markets, this added flexibility can make the homebuying process smoother and more competitive.
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What Does This Mean for VA Borrowers?
For many homeowners, the VA Home Loan Program Reform Act is ultimately about creating stronger protections during financial hardship. The law is especially important for:
- Borrowers at risk of mortgage default
- Veterans recovering from temporary financial setbacks
- First-time VA buyers navigating competitive housing markets
- Homeowners seeking more flexible foreclosure prevention options
Potential Benefits
- More flexibility during financial hardship
- Greater focus on helping Veterans keep their homes
- Better access to professional real estate representation
- Stronger long-term stability for the VA loan program
- More standardized borrower assistance processes
Potential Drawbacks
- Some program details are still being finalized
- Rollout timelines may vary by servicer
- Certain benefits could take time to fully implement
- Borrowers may still need to meet servicer-specific requirements
If you’re struggling with payments or concerned about your options, it’s important to speak with your loan servicer or a VA-approved lender early. Waiting too long can limit available solutions.
It’s also worth remembering that portions of the rollout remain subject to additional VA guidance and policy updates.
Will This Affect Existing VA Home Loans?
For most homeowners, existing VA mortgage terms will not change retroactively. That means your current interest rate, loan balance and original mortgage terms generally stay the same unless you pursue a modification or another assistance option.
However, some reforms may affect how loan servicing and foreclosure prevention programs work if you experience financial hardship in the future. Veterans with existing VA loans should continue making payments normally and stay in communication with their mortgage servicer if financial challenges arise.
When Will This Take Effect?
The VA Home Loan Reform Act was signed into law on July 30, 2025 and is currently in effect. One of the law’s major provisions establishes a five-year partial claim program intended to help Veterans avoid foreclosure.
At the same time, portions of the implementation process are still developing. Draft servicing policies related to the partial claim program began emerging in early 2026, meaning some procedures and timelines may continue to evolve as the VA finalizes guidance.
Are the Requirements Changing for VA Loan Eligibility?
No, the VA Home Loan Program Reform Act does not change standard VA loan eligibility requirements.
VA loan eligibility is still generally based on:
- Military service requirements
- Available entitlement
- Lender financial qualifications
- Credit and income standards
The law focuses primarily on loan servicing, foreclosure prevention and borrower protections rather than changing who qualifies for the VA loan benefit itself.
If you have questions about your eligibility, current mortgage or how these changes may affect you, connect with a Veterans United VA loan expert who can walk you through your options and help you understand the latest updates surrounding this reform act and related borrower assistance programs.
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