WASHINGTON — Today, the Department of Veterans Affairs issued guidance to strongly encourage mortgage servicers to implement a targeted moratorium on foreclosures for Veterans with VA-guaranteed loans through December 31, 2024. This will help Veterans and their families stay in their homes beyond the end of the current foreclosure moratorium, which will end on May 31.
This new, targeted foreclosure moratorium will help ensure that Veterans and their families are able to stay in their homes while mortgage servicers implement the Veterans Affairs Servicing Purchase (VASP) program – a new, last-resort tool for qualified Veterans experiencing severe financial hardship. Through VASP, VA will purchase qualified Veterans’ modified loans from their loan servicers and then place them in the VA-owned portfolio as direct loans – making the loans more affordable for Veterans. VASP officially launches on May 31 and mortgage servicers must have it fully implemented by October 1, 2024.
Veterans facing financial hardship should contact their mortgage servicer and work with them to explore all available home retention options. For additional assistance, Veterans can always contact VA directly by calling 877-827-3702, option 4, or by visiting the VA Home Loans website for additional information.
“When a Veteran falls on hard times, we work with them and their loan servicers every step of the way to help prevent foreclosure, including offering repayment plans, loan modifications, and more,” said Under Secretary for Benefits Josh Jacobs. “We’re calling on mortgage servicers to follow a targeted foreclosure moratorium so we can make sure that Veterans get the support they need to stay in their homes.”
When a Veteran experiences financial hardship, VA has a range of options to help stay in their homes. VA’s home retention options include:
- Forbearance Agreements: Temporarily reducing or pausing payments for those facing short-term financial difficulties. Loan payments will still be owed at the end of the special forbearance and will not be automatically put on the end of the loan.
- Repayment Plans: Arranging plans to catch up on missed payments gradually.
- Loan Modifications: Adjusting loan terms to make monthly payments more manageable.
- VASP: Once a Veteran has exhausted all other home retention options, they may qualify for VASP. With VASP, qualified borrowers will have a fixed 2.5% interest rate, which will provide a consistent, affordable payments for the remainder of their loan. (Importantly, Veterans will not apply directly for VASP. Instead, mortgage servicers for VA loans will consider VASP if all other home retention efforts have been exhausted.)
This targeted foreclosure moratorium will apply to all VA-guaranteed loans unless 1) the loan is secured by property that is vacant or abandoned, 2) the servicer has documented that the borrower desires neither to retain homeownership nor avoid foreclosure, 3) the servicer has not received a monthly payment for at least 210 days, and the borrower is not responding to the servicer’s outreach attempts, or 4) the servicer has evaluated the borrower for all home retention options but has determined that no home retention option, including VASP, or alternative to foreclosure will work for the borrower. For more information on the targeted foreclosure moratorium, please visit the VA Home Loan website.
VA and the Biden-Harris Administration are committed to doing everything possible to prevent foreclosures for Veterans and their families. Over the past several months, VA has strongly encouraged an initial foreclosure moratorium, extended its COVID-19 modification program (now extended through September 30, unless the mortgage servicer implements VASP sooner), and worked with Veterans directly to help them retain their homes. VA helped more than 145,000 Veterans and their families avoid foreclosure in 2023 alone.
For additional assistance, visit VA’s foreclosure support and prevention website.
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Facing Foreclosure? VA shares important updates to help you keep your home
VA understands how stressful it can be to face the possibility of foreclosure, and we are committed to doing everything possible to help Veterans and their families stay in their homes. That’s why, today, VA strongly encouraged mortgage servicers to continue to pause foreclosures of VA-guaranteed home loans through December 31, 2024. This targeted moratorium will give Veterans and their families more time to explore all home retention options.
Here's everything you need to know about how to find support and keep your home:
What support options are available to me if I’m worried about foreclosure? With VA’s Home Retention Waterfall, there are a series of steps designed to provide you with multiple options to avoid foreclosure:
- If you’re facing short-term financial difficulties, there are forbearance agreements that could help you avoid foreclosure by temporarily reducing or pausing payments. Under this option, your loan payments will not be forgiven, but you will have the time you need to work through short-term challenges.
- If you’ve missed loan payments, you might be able to arrange a plan to catch up gradually. This is a called a repayment plan.
- If you need further assistance, the next step is a loan modification – which adjusts the rate and term of your loan to make payments more manageable. Under this scenario, a high-interest rate environment may cause your modified mortgage payment amount to increase.
- Finally, if these options aren’t enough and you’re experiencing severe hardship, VA’s new VASP program could be a last-resort option for qualifying Veterans. Through VASP, VA will purchase the modified loan from your loan servicer and then place it in the VA-owned portfolio as a direct loan — therefore making it more affordable.
How do I qualify for VASP?
Importantly, VASP is not something you can apply for directly with VA. Instead, if you exhaust all other home retention options, your mortgage servicer will evaluate whether you are qualified for VASP and submit a request on your behalf.
Who do I call to get the support I need?
If you’re facing financial hardship, you should first contact your mortgage servicer and work with them to explore all available home retention options. If you need additional support, you can always contact VA directly by calling 877-827-3702, option 4, or by visiting the VA Home Loans website for additional information.
VA is here to help you every step of the way. We helped more than 145,000 Veterans and their families avoid foreclosure in 2023 alone — and we are committed to doing everything in our power all Veterans stay in their homes.
Reporters and media outlets with questions or comments should contact the Office of Media Relations at vapublicaffairs@va.gov
Veterans with questions about their health care and benefits (including GI Bill). Questions, updates and documents can be submitted online.
Veterans can also use our chatbot to get information about VA benefits and services. The chatbot won’t connect you with a person, but it can show you where to go on VA.gov to find answers to some common questions.
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