VA Partial Claim Program Stops Foreclosures, but Is It Enough?

To combat rising repossessions, the Department of Veterans Affairs has officially launched the Partial Claim Program, a new foreclosure-prevention tool for struggling military Veterans behind on their VA-backed mortgages. 

Reauthorized by Congress in July 2025, this initiative was opened for submissions on June 15, 2026, and mortgage servicers have until Nov. 28, 2026, to fully implement the program into their systems. 

The hope is, as VA Secretary Doug Collins put it in the department’s announcement, that America’s brave men and women in uniform will get the relief they deserve to stay put. 

“We are grateful to Congress and President Trump for creating VA’s Partial Claim Program, which will help keep thousands of Veterans in their homes,” said Collins.

How the VA Partial Claim Program will work

The VA Partial Claim Program operates through a collaborative, step-by-step process between lenders and the government—and is being celebrated by both sides of the arrangement.

“The partial claims program is a positive step forward that will help more Veterans facing financial hardship keep their homes,” says Chris Birk, vice president of mortgage insight at Veterans United Home Loans. 

“The partial claims passage reflects a bipartisan effort and gives Veteran homeowners a key tool on par with other mortgage options. VA loans have long been the gold standard for Veteran homeownership, and this new partial claim option makes it even stronger.”

Here’s how it will work, according to the VA:

First, mortgage servicers identify Veterans in default who may qualify for assistance and place them on a three-month trial payment plan to evaluate their ability to sustain their home loans. 

Once a Veteran successfully completes this trial period, the servicer pays the overdue balance to bring the mortgage completely current, and the VA subsequently reimburses the servicer for that amount. 

Ultimately, the mortgage servicer is required to then repay the VA whenever the loan is paid in full, refinanced, or the property is sold.

Help at a critical time—but is it enough?

While the program is being applauded, critics argue that the rollout feels like a reactionary Band-Aid following self-inflicted pressure in the Veterans housing market. 

In May 2025, the Trump administration abruptly terminated its previous mortgage rescue initiative before establishing a permanent alternative. An entire year has passed since then.

Consequently, over 10,000 Veterans have already lost their homes, according to data from NPR,  while an additional 90,000 remain trapped in delinquency. 

So, is this intervention ultimately too little, too late? Not if you consider the alternative. 

The primary advantage of this program is that it preserves the underlying mortgage terms—meaning Veterans keep their low interest rates. And as anyone who nabbed a 3% mortgage in 2021 will tell you, having a lower rate means all the difference. 

“The fact that Veteran homeowners can keep their lower mortgage rate rather than adjust to current market rates is critical,” says Birk.

He notes that nearly 70% of active VA loans have a rate below 5%, according to Ginnie Mae data, and while the partial claim policy doesn’t reduce the original loan balance, keeping the low rate is the key to making payments manageable. 

“Many Veterans facing hardships struggled to make their old mortgage payments and couldn’t afford a new loan in today’s rate environment,” Birk adds.

“For example, the monthly principal and interest payment on a $400,000 loan with a 4.5% rate is $1,547. A loan modification with a 6.5% rate increases that Veteran’s housing payment by about $400 a month.”

How to take advantage of the program

If you’re a Veteran in foreclosure, Birk lays out what you should do first. 

“Veteran homeowners facing foreclosure should contact their loan servicer to see if they’re eligible for a partial claim,” he says.

“The partial claims program is part of the VA’s overall home retention strategy, which is often referred to as a ‘waterfall’ approach. When a Veteran homeowner is in distress, loan servicers evaluate their options using this step-by-step approach.”

As mentioned, the VA just started accepting trial payments for partial claims and gave mortgage servicers until late November to update their systems to reflect the partial claims option.

But Birk says if you run into issues, help is there for you.

“Veterans having trouble coming to terms with their servicer can contact the VA loan program directly for more information,” he advises.