VA Home Loan Program Reform Act

House Votes

This legislation aims to help veterans keep their homes if they fall behind on VA-backed mortgages. It lets the Department of Veterans Affairs (VA) pay a lender to stop a foreclosure, as long as the veteran and the lender sign paperwork so the VA has a legal stake in the home. The VA must also set clear, step-by-step options to try to prevent foreclosure, and certain changes to a loan can’t happen until those options are tried first.

It also creates a five-year “Partial Claim Program.” In this program, the VA can buy part of what is owed on a primary home loan that is in default or at risk, to help the homeowner get back on track. If someone later defaults on a loan the VA helped with under this program, they would owe the VA for any losses. The VA must also report how it will make sure veterans using VA loans aren’t put at a disadvantage when seeking help from real estate agents or brokers.

• Who is affected: Veterans with VA-guaranteed home loans.
• What changes: VA can pay lenders to stop foreclosure; a five-year partial claim program to cover part of missed payments; required step-by-step help to avoid foreclosure; a report on fair access to real estate representation for veterans.
• When: The partial claim program lasts five years.