In a major win for U.S. veterans, the Senate has passed a new law aimed at preventing thousands of military families from losing their homes. The legislation is a direct response to the chaos created by a series of decisions from the Department of Veterans Affairs (VA) that left many veterans with no good options to avoid foreclosure.
The newly passed measure, supported by both parties in Congress, allows veterans to move missed mortgage payments to the back of their loan—effectively resetting their mortgage without increasing their monthly costs. This fix offers veterans a lifeline by letting them catch up without having to refinance at today’s higher interest rates or sell their homes.
Table of Contents
What Led to the Crisis
The trouble began in 2022 when the VA abruptly canceled a pandemic-era mortgage relief option that let borrowers defer missed payments. Then, in an attempt to help, the VA launched the VA Servicing Purchase program (VASP), which temporarily helped over 33,000 veterans avoid foreclosure by refinancing their loans at lower rates.
But on May 1, 2025, VASP was abruptly canceled under pressure from Republicans, leaving tens of thousands of veterans without any comparable relief. That decision, made without a replacement plan, created an emergency where many veterans were told to sell their homes or prepare to lose them.
According to ICE Mortgage Technology, nearly 79,000 veterans and active-duty military members are now delinquent and facing possible foreclosure.
What the New Law Does
The new legislation revives and improves the deferred payment strategy that the VA removed back in 2022. Under the law:
- Missed payments will be moved to the end of the loan term.
- Veterans will resume making regular monthly payments as if they were current.
- The deferred payments will be paid later—when the borrower sells, refinances, or finishes paying off the loan.
This approach brings VA home loans in line with relief options available to most other mortgage holders in the U.S., such as those with loans backed by FHA, Fannie Mae, or Freddie Mac.
Bipartisan Support
Lawmakers across party lines backed the fix, a rare display of bipartisanship. In a joint statement, leaders from both the House and Senate Veterans’ Affairs Committees emphasized the importance of the law.
Senator Jerry Moran (R-KS), Senator Richard Blumenthal (D-CT), Representative Mike Bost (R-IL), and Representative Mark Takano (D-CA) said the law will “assist veterans who are facing financial hardships and provide VA with a tool to better help veterans stay in their homes and avoid foreclosure.”
They also highlighted the long-standing impact of the VA Home Loan Program, which has helped veterans build wealth and stability since it began in 1944.
Why This Fix Was So Urgent
Before the bill passed, veterans were the only major group of mortgage holders in the U.S. without access to this type of deferred payment program. Bob Broeksmit, president of the Mortgage Bankers Association, said this created an unfair situation that left veterans uniquely exposed to foreclosure.
He added that the deferred payment method “is a proven approach that will help thousands of veterans.”
What Happens Next
Although Congress passed the bill, it still requires the president’s signature to become law. Once signed, the VA will be responsible for implementing the new program and working with mortgage companies to ensure veterans can take advantage of it.
In the meantime, members of Congress are urging the VA to ask mortgage servicers to pause foreclosures until the program is up and running. So far, the VA has not confirmed whether it will issue such a request.
VA press secretary Pete Kasperowicz said, “We appreciate Congress’s work on the VA Home Loan Program Reform Act, which VA will implement once President Trump signs it into law.”
If you’re a veteran concerned about your mortgage, it’s wise to stay in touch with your lender, avoid missing communication from the VA, and monitor updates as the new law moves forward.
FAQs
What does the new veteran mortgage law do?
It lets vets move missed payments to the end of their loan.
When will the program start?
After the president signs the bill and VA implements it.
Will this stop foreclosures now?
Congress wants a pause, but VA hasn’t confirmed it.
How many veterans are affected?
About 79,000 are delinquent and at risk of foreclosure.
Who supported the new law?
Both Republicans and Democrats backed the fix.
