WASHINGTON — More than 10,000 veterans have lost their homes to foreclosure since last year following the shutdown of a key mortgage relief program within the Department of Veterans Affairs, with tens of thousands more at risk, according to a new report.
The surge in foreclosures began after the Trump administration ended a pandemic-era safety net known as the VA Servicing Purchase program, or VASP, in May 2025, NPR reported. The program had provided struggling veterans with low-interest loan modifications designed to help them stay in their homes, NPR added.
Industry data cited by NPR show more than 10,000 VA-backed loans have gone to foreclosure since the program’s termination — the fastest pace in a decade — while roughly 90,000 additional borrowers are behind on payments or in the foreclosure process.
The issue traces back to earlier policy changes during the Biden administration, when a pandemic forbearance program was ended before some borrowers had completed it, leaving many veterans suddenly responsible for large lump-sum repayments. After reporting by NPR highlighted the problem, the VA temporarily paused foreclosures and introduced VASP as a remedy.
Mortgage Industry Has Warnings
However, mortgage industry representatives warned lawmakers that eliminating the replacement program without a substitute would lead to increased foreclosures. The Trump administration proceeded with the shutdown, citing concerns over costs, NPR reported.
Consumer advocates say veterans now have fewer protections than other homeowners with federally backed loans, many of which offer repayment options that do not increase monthly costs. In contrast, veterans often must accept loan modifications at higher interest rates, raising monthly payments or face foreclosure.
The VA has said it plans to introduce a new assistance program, but it is not expected to be available for several months. Housing and industry groups warn the new option could still leave borrowers with higher payments than those offered under previous programs, NPR reported.
Significant Personal Impacts
The foreclosure crisis has had significant personal impacts. NPR highlighted cases of veterans and their families who, after using VA-backed loans to achieve homeownership, are now facing eviction due to shifting policies and limited options to remain current on their mortgages.
Advocates say the situation underscores the importance of stable, consistent support programs for veterans using one of the government’s most widely used homeownership benefits.
