The federal government just ended a crucial lifeline for veterans struggling with their mortgages, precisely as foreclosure rates across the country begin to climb.
The U.S. Department of Veterans Affairs has terminated the Veterans Affairs Servicing Purchase (VASP) program. Designed to help military homeowners avoid foreclosure, the termination leaves around 60,000 veterans vulnerable to losing their homes.
This specialized program allowed the VA to purchase loans from private mortgage servicers for years when veterans fell behind on payments. This intervention gave struggling veterans breathing room to find solutions before facing foreclosure. But with the program’s termination, that safety net has vanished.
A perfect storm for veteran homeowners
The timing couldn’t be worse. According to ATTOM Data Solutions, a leading provider of nationwide property and foreclosure data, foreclosure rates are already trending upward nationally as more homeowners fall behind on mortgage payments. More than 93,000 properties received filings in the first quarter of 2025 — an 11% increase from the previous quarter. Veterans now face this rising tide without crucial protections they once had.
This crisis hits amid an already challenging housing landscape. Mortgage rates remain stubbornly high, limiting refinancing options. Meanwhile, rising property taxes and skyrocketing insurance costs have squeezed homeowners from multiple directions, creating financial pressures that can hit veterans particularly hard.
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How the program worked and why it mattered
The VASP program functioned as an emergency backstop when veterans fell behind on payments. The VA could purchase these troubled loans directly rather than letting private lenders move toward foreclosure. The VA could then work with veterans on sustainable repayment plans, loan modifications, or other alternatives.
The program recognized the unique challenges veterans face, including potential service-related disabilities, employment transitions, and other military service impacts that can create temporary financial hardships.
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What veterans can do now
Veterans currently struggling with mortgage payments have several options despite the program ending:
- Contact the VA’s financial hardship center immediately.
- Seek help with loan modification or forbearance options directly with your current mortgage servicer.
- Seek help from housing counselors certified by the Department of Housing and Urban Development.
- Investigate state-specific foreclosure prevention programs that might be accepting applicants.
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The broader impact for veterans
This crisis for veterans is unfolding within an already tough housing market. Rising inventory has made selling a distressed property harder, as buyers can afford to be pickier. Veterans unable to make payments now face weaker prospects for selling before foreclosure becomes inevitable.
The end of this program marks a significant step back in protections for those who have served. As foreclosures rise nationwide, veterans who sacrificed for their country now face sacrificing their homes, too, precisely when they need support most.
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