U.S. Department of Veterans Affairs launches partial claim program for at-risk home loans

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VA launches partial claim program

Highlights

VA Partial Claim Program launches today, enabling mortgage servicers to place defaulted borrowers on a three-month trial payment plan before curing loan defaults.
Servicers who cure loans are reimbursed by VA for overdue amounts, with VA repayment required if the loan is paid in full, refinanced, or property is sold.
VA's loan guaranty program issued over 500,000 new home loan guarantees in fiscal year 2025 and has supported more than 29 million home purchases since inception.

Program structure and eligibility steps

As reported by VA News, the VA Partial Claim Program formally launches today to support Veterans whose mortgages are in default but who may still be able to resume regular payments. Under the process, mortgage servicers identify potentially eligible borrowers and place them on a three-month trial payment plan to test whether they can stay current on their loan.

If a borrower completes the trial period successfully, the mortgage servicer pays the overdue mortgage amount to bring the loan current. VA then reimburses the servicer for that amount, and the servicer must repay VA when the loan is paid in full, refinanced, or the property is sold.

VA Secretary Doug Collins says the department is grateful to Congress and President Trump for establishing the program and says it is expected to help keep thousands of Veterans in their homes. The program is authorized by the VA Home Loan Reform Act, which President Trump signed into law on July 30, 2025.

Foreclosure prevention and housing market reach

Officials present the partial claim option as one of several home-retention tools available through VA's loan guaranty framework. Other options include repayment plans, VA traditional loan modifications, 30-year and 40-year loan modifications, as well as disaster-related modification programs.

Veterans who are having difficulty resolving issues with their mortgage servicer can contact VA by phone for assistance. The department also directs borrowers to its Loan Guaranty Service website for more information on the Partial Claim Program and VA-backed home loans.

VA says its home loan guaranty program supports access to housing through zero-down payment requirements and competitively low interest rates. Since the guaranty program began, the department says it has helped Veterans, service members and survivors buy more than 29 million homes, including more than 500,000 new home loans guaranteed in fiscal year 2025.

Our earlier article on Bavarian Sky UK 8 Plc’s UK residential mortgage-backed notes explained that the deal moved forward after the issuance received expected ratings, supported by a review of the transaction structure and the underlying mortgage pool. We noted that the mortgage portfolio’s credit quality was viewed as stable and that investor interest could be underpinned by market conditions and the resilience of the UK housing sector.

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