VA Home Loan Program Reform Act
Sponsor: Rep. Van Orden, Derrick [R-WI-3] · Latest action: 2025-07-30
This law reforms VA home loan default and foreclosure prevention procedures, creates a new Partial Claim Program, and adjusts homeless veteran services funding.
Where it is in the pipeline
Became lawSummary
The bill updates VA authority to help veterans avoid foreclosure on VA-guaranteed home loans, including paying loan holders directly, requiring a mandatory sequence of loss mitigation options, and establishing a new "Partial Claim Program" letting the VA pay part of a defaulted loan's balance to catch up arrearages. It also requires a VA report on real estate agent representation for veteran homebuyers and increases funding authorization for homeless veteran service programs through 2030.
Key provisions
- Authorizes VA to pay loan holders directly and secure an interest in the property to prevent foreclosure on guaranteed loans
- Requires VA to establish a mandatory sequence of loss mitigation options before a loan can be fully purchased or foreclosed
- Creates a new Partial Claim Program allowing VA to pay up to 25-30% of unpaid loan balance to resolve defaults, subordinate to the first lien
- Limits partial claims to one per loan (with disaster exceptions) and terminates the program 5 years after enactment
- Increases authorized funding for homeless veteran service programs: $344 million for FY2025-2026, then $257.7 million annually through FY2030
Who is affected
- Veterans with VA-guaranteed home loans facing default or foreclosure
- Mortgage loan holders/servicers of VA-guaranteed loans
- Homeless veterans served by VA comprehensive service programs
- Real estate agents and brokers working with veteran homebuyers
Cost & funding
Authorizes $344 million for homeless veteran programs in FY2025-2026, then $257.7 million annually through FY2030; other program costs not specified in the text.
Read the official text on congress.gov.