Veterans Housing Stability Act of 2025

This bill helps veterans keep their homes when they fall behind on VA-backed mortgages. It creates a “Partial Claim Program” where the VA can pay part of what is owed to the loan holder if a loan is in default or close to it. The veteran then repays the VA later, without interest, usually when the mortgage ends. The VA’s help is capped at 25% of the unpaid principal, but it can go up to 30% for people already behind when the law takes effect or after a major disaster. Any payment must first cover missed payments and needed costs like taxes, insurance, or HOA dues, and lenders cannot charge the veteran fees for using this help .

If a veteran later defaults on this VA help, they owe the VA for any loss, and their future VA home loan benefit is reduced until they’ve repaid it. Foreclosure on the VA’s lien must follow state or local rules. The VA has wide discretion to run the program, can use quick guidance for up to three years (and extend it), and will audit lenders for compliance. Lenders that knowingly make false statements can face civil penalties—either twice the VA’s loss or up to $27,894—and may be charged added costs and interest. The VA’s decisions under this program are final and not open to court review .

• Who is affected: Veterans with VA-backed home loans, and the lenders who service those loans .
• What changes: VA can step in with a no-interest partial claim to cover missed amounts; lenders must apply funds to arrears first and can’t charge the borrower program expenses; penalties for lender fraud increase accountability .
• When: The VA may run the program through administrative guidance for up to three years from when it starts, with possible extensions .