More than 10,000 veterans have lost their homes to foreclosure since last May, when the Trump administration shuttered a key safety net in the VA home loan program with virtually nothing to replace it. Another 90,000 are heading toward the same fate.

That is the highest pace of VA loan foreclosures in a decade, according to data from ICE Mortgage Technology. And it is the direct result of a policy choice: killing one program before standing up another, despite explicit warnings from the mortgage industry, housing advocates, and veterans’ organizations.

The roots of this crisis trace back to a cascade of bureaucratic missteps across two administrations. In October 2022, the Biden-era VA abruptly ended a pandemic forbearance program while thousands of veterans were still enrolled, demanding lump-sum repayments many could not afford. After NPR exposed the problem in late 2023, the VA halted foreclosures nationwide for a year and developed a fix — the VA Servicing Purchase Program, or VASP, which offered struggling veterans new mortgages at a fixed 2.5% interest rate.

VASP ultimately helped more than 33,000 veterans keep their homes. Then, on May 1, the Trump administration killed it — one week’s notice, no replacement, no grace period.

The Gap Nobody Owns

The VA has since been developing a new partial claim program, authorized under the VA Home Loan Program Reform Act passed by Congress with bipartisan support. But the program remains months from operation. In the interim, veterans who fall behind on their mortgages face worse options than virtually any other category of federally backed homeowner. Borrowers with loans through Fannie Mae, Freddie Mac, or the Federal Housing Administration all have emergency options that do not raise interest rates or monthly payments. Veterans do not.

With current mortgage rates hovering between 6% and 7%, veterans who took out loans at lower rates are being forced into modifications that add hundreds of dollars to their monthly bills. Jerome Thomas, an Air Force veteran in Port Charlotte, Florida, saw his interest rate more than double to 6.8% — adding $800 a month to his payment. He told NPR he cannot afford it and is now receiving foreclosure warnings again. “I got my three kids in here, I’ve got the wife, she’s a teacher […] it’s bad,” Thomas said.

A Preventable Disaster

The mortgage industry saw this coming. In March 2025, Elizabeth Balce, representing the Mortgage Bankers Association, told the House Committee on Veterans’ Affairs: “Foreclosure. Period. That’s really where it’s gonna come to.” Less than two months later, the administration shut VASP down anyway.

The Mortgage Bankers Association has since warned the VA that its draft rules for the new partial claim program would still leave veterans with worse options than other homeowners. Under the current proposal, if a modified loan would raise a veteran’s payment by up to 15%, servicers must place them in that costlier mortgage rather than allowing them to defer missed payments. The association has urged the VA to restructure its rules so that higher payments are a last resort.

VA press secretary Pete Kasperowicz said in a statement that the VA’s home loan program is “based on the premise that while Veterans may need some assistance, they must generally be able to make their mortgage payments.” The VA did not respond to NPR’s questions about why it shut down VASP without first replacing it.

Too Late

For Leann Ledford and her husband — a Marine wounded in Afghanistan who has PTSD and a brain injury — the bureaucratic buck-passing has concrete consequences. Their Spokane, Washington home was sold in a foreclosure sale. They did not learn about it until someone knocked on their front door. Her husband is having seizures again. Their 10-year-old son, who had finally found stability, faces displacement.

Ledford said they could have afforded the payments under VASP. They could have afforded their original $1,447 monthly mortgage under the new partial claim program. But because the VA killed one program before building the other, they got neither.

Sources