Originally published: 2024-04-10T14:00:00+00:00. Historical source article: benefits, rules, amounts and deadlines may have changed. Check the official source for current information.
WASHINGTON — On May 31, 2024, the Department of Veterans Affairs will launch a new program — the Veterans Affairs Servicing Purchase (VASP) program — to help more than 40,000 Veterans experiencing severe financial hardship avoid foreclosure and stay in their homes.
VASP is a new, last-resort tool in VA’s comprehensive suite of home retention options for eligible Veterans, active-duty Service members, and surviving spouses with VA-guaranteed home loans who are experiencing severe financial hardship. Through VASP, VA will purchase defaulted VA loans from mortgage servicers, modify the loans, and then place them in the VA-owned portfolio as direct loans. This will empower VA to work directly with eligible Veterans to adjust their loans — and their monthly payments — so they can keep their homes. With VASP, these borrowers will have a fixed 2.5% interest rate, which will provide a consistent, affordable payment for the remainder of their loan.
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 a foreclosure moratorium through May 31, 2024, extended its COVID-19 modification program through May 31, 2024, and worked with Veterans directly to help them retain their homes. In total, VA helped more than 145,000 Veterans and their families avoid foreclosure in 2023 alone.
“This new program will help more than 40,000 Veterans and their families stay in their homes, and there’s nothing more important than that,” said VA Secretary Denis McDonough. “We at VA are committed to doing everything in our power to help Veterans avoid foreclosure, and that’s exactly why we’re launching VASP – to help the Veterans who need it most.”
“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. “But some Veterans still need additional support after those steps, and that’s what VASP is all about. This program will help ensure that when a Veteran goes into default, there is an additional affordable payment option that will work in a higher interest rate environment — so they can keep their homes.”
Veterans will not apply directly for VASP. Instead, beginning May 31, mortgage servicers will identify qualified borrowers and submit requests on behalf of Veterans based on a review of all home retention options available and qualifying criteria. Veterans facing financial hardship should work with their mortgage servicers to explore available options.
VA anticipates that VASP will result in a government subsidy spending reduction of approximately $1.5 billion from 2024 to 2033, making it beneficial for Veterans, taxpayers, servicers, and loan holders alike. This is because the savings associated with avoiding foreclosures outweighs the cost of purchasing these homes. VA has existing authority to establish and implement VASP under 38 U.S.C. § 3732 and § 3720.
VA is proud to help Veterans get access to — and retain — the homes they deserve by guarantying home loans with no down payment requirements and competitively low interest rates. In total, VA has helped Veterans, service members, and survivors obtain more than 28 million homes. Currently, more than 3.7 million Veterans have active home loans guaranteed by VA, and VA guaranteed 400,695 home loans in 2023 alone.
Veterans who are having difficulty reaching a resolution with their mortgage servicer can contact VA at 877-827-3702, option 5. Learn more about the policy and the VASP program. For more information on VA home loans, visit the VA home loans website.
Source: U.S. Department of Veterans Affairs. Its Veterans is an independent publication and is not affiliated with or endorsed by the U.S. government.
