While the path to homeownership can be filled with unique challenges, Veterans should know that it’s also paved with opportunities and support from VA. Throughout this news post, we explore the various options designed to keep you in your home, offering hope and possible solutions for when/if you experience financial hardships. Remember, you’re not alone in this journey—support is just a call away.
How do you get help if financial hardships arise?
If you are having trouble making payments, the first step is to contact your mortgage servicer to discuss your options. You can find your mortgage servicer’s phone number on your monthly bill. For Veterans facing foreclosure, VA understands these challenges and remains committed to assisting Veterans through one-on-one support from a VA Loan Technician and specific VA home retention options.
What are the options to keep your home?
VA’s Home Retention Waterfall provides mortgage servicers with steps to help you keep your home and avoid foreclosure. If you’re going through a tough time financially, there are some options that might provide relief.
A special forbearance could give you a temporary break from making mortgage payments, giving you some extra time to sort out your finances. However, after the forbearance period ends, your servicer will need to approve the loan for another option, as in a repayment plan or loan modification. Otherwise, you’ll need to pay the past due amount in a lump sum and continue paying your normal monthly loan payments. This is because your servicer won’t automatically add the outstanding loan payments to the end of your loan.
Another option is a repayment plan. If you’ve missed a few payments due to a temporary financial hardship, this plan spreads out your current monthly mortgage payment plus the amount past due over a short period without changing your interest rate. This could save you thousands in interest over time compared to a loan modification. After the repayment period, your mortgage payments return to the original amount.
If your hardship is expected to last six months or longer, your mortgage servicer may consider a loan modification. A loan modification permanently changes one or more of your mortgage loan terms to help you get caught up. The modified terms can include the interest rate, length of loan, the type of loan and principal balance. Missed mortgage payments and associated fees are added to the total loan balance. A loan modification with a high interest rate may increase your modified monthly payment for the remainder of the loan. If your mortgage servicer offers to extend the loan to a 40-year mortgage to lower your monthly payment, bear in mind that a longer loan term may lead to paying thousands of dollars in additional interest over the life of the loan.
If these options won’t work for your situation, your mortgage servicer will evaluate whether you qualify for the new Veterans Affairs Servicing Purchase (VASP) program, which is a last resort option. VASP isn’t a program that you can apply for yourself. If your servicer determines that VASP is the only option for keeping your home and you want to participate, they will submit your information to VA. Through VASP, VA will purchase the modified loan from your mortgage servicer and place it in the VA-owned portfolio as a direct loan, making it more affordable.
How these options could affect you
Before signing any documents, it’s essential to understand how these options will affect your finances, monthly payments,and mortgage at this present time, as well as in the long-term. Being aware of your financial standing empowers you to make informed decisions.
What if I need help or more information?
If you need additional support, you can always contact VA directly by calling 877-827-3702, option 4, or by visiting the VA website for help avoiding foreclosure for more information. VA help you every step of the way. More than 145,000 Veterans and their families avoided foreclosure in 2023 alone, and VA is committed to helping Veterans keep their homes.
Topics in this story
More Stories
VA has updated its process for awarding G.I. Bill benefits. This means that many Veterans who served multiple periods of military service (for example, Veterans who reenlisted) may be eligible for additional benefits for themselves or their beneficiaries.
For Veterans especially, the risk of identity theft is high, as criminals target reoccurring monthly benefits payments. Bad actors utilize stolen privacy information to exploit VA benefits, health care and pensions.
Vietnam Veteran David Chee is among the many Native American Veterans and service members who have dedicated their lives to military service. Chee proudly served with the Army's 82nd Airborne, parachuting into the jungles of Vietnam. Chee now owns a home he purchased on Navajo tribal lands with the help of the VA Native American Direct Loan.
I need help we lost our VA backed home in 2019 a month later I received back pay for the 100% decision I was waiting on. We filed bankruptcy to try to save our home. All these years later I’m now eligible to finally buy a home again but homes are too expensive in the same community we once lived. After burying brothers who lost the fight to PTSD and all the sh-t my wife and I have been through we deserve our happily ever after home. VA now says that I’d have to pay back 62,000 to get my entitlement reinstated and doesn’t give a sh-t about the 300,000 plus difference in equity someone has made in our old home. The VA let Navy Federal take my home while they knew they would be declaring me 100% for combat PTSD. The VA doesn’t give a sh-t about us they want us to kill ourselves to save money and trouble
Try defining what a VASP or Veterans Affairs Servicing Purchase, you say it will be put in the VA’s portfolio, meaning what to the veteran? They get to stay in their home, pay or not pay who? Who owns the home? The article/information is unclear and incomplete, unhelpful! Try including all information and how it affects the veteran in the end. What’s the end result? Who owns what?
I have read this many times. 10 years ago, I needed such help after a divorce. Contacted my lender. Contacted VA. Still have all those emails. No options to save my home were offered and I had to file Chapter 7 and lost my home in the process. I’m still in the process of trying to pay back the VA for full entitlement
I wonder why I was never informed about the Programs that the VA Offers to Avoid Foreclosure? I wish someone would’ve told or talked to me about these programs! I lost my Home in 2019 and I wish there was Someone that I could’ve Reached out to! It also caused me to go into Homelessness for a Period of time, only to Reach back out to the VA for Help during that dark time in my Life! Thank You and GOD Bless and Happy New Years!! I feel the Va as a Whole Should be More Aware of the Veterans VA Loan Status! To Stay Informed of each Veterans Needs. I Thank GOD that Congress voted to repeal the GPO and WEP Provisions. We deserve every penny that we can get. I live on the VA Pension and it’s Living at the Lowest Poverty level in the US. I earned my SS retirement benefits and I definitely will live a little better in Life! Again, Thank You and GOD Bless!!
I notice that there is no mention of the FHA HECM program for borrowers over 62. If this is not considered first, the other options mentioned can easily prevent the borrower from using a HECM later. This is often overlooked when an income drop due to the death of a spouse is the problem.