An NPR investigation found that hardship-related mortgage modifications raised monthly payments by at least $150 for more than 15,000 veterans after the Department of Veterans Affairs (VA) ended its Veterans Affairs Servicing Purchase (VASP) Program. NPR said more than 700 veterans faced increases of at least $1,000, based on VA data it obtained.
NPR’s analysis found payments went up for 63% of veterans who received modifications. For comparison, the increase applied to 2% of modifications on loans guaranteed by Fannie Mae and Freddie Mac, NPR reported. In one case, Army veteran Scott Boyd’s payment rose by $1,181 a month after his interest rate changed from 2.75% to 6.75% and the loan term was extended to 40 years. Boyd called the change “outrageous,” NPR reported.
The VA stopped accepting new VASP submissions May 1, 2025, after launching the program in 2024. VASP allowed the agency to take over defaulted VA-guaranteed loans from servicers, change their terms and hold them as direct loans with a fixed 2.5% rate. The VA said it ended the program to prioritize its home-loan-guaranty work and described mortgage restructuring as outside its role.
The House Veterans’ Affairs Committee said the VA had acquired loans worth more than $5.4 billion through VASP. That figure represents the value of the loans, not taxpayer losses. The VA had projected the program would reduce subsidy spending by about $1.5 billion from 2024 to 2033; the figures measure different things and do not establish the program’s final net cost.
Congress authorized a different form of mortgage relief in July 2025. Under the partial-claim program, the VA can pay eligible arrears and take a subordinate secured interest in the property. Borrowers must first complete a three-month trial payment plan. NPR reported that Rep. Mark Takano, ranking member of the House Veterans’ Affairs Committee, called its findings “the height of insanity.”
The VA began accepting partial-claim submissions June 15, 2026. Mortgage servicers have until Nov. 28, 2026, to implement the program in their systems.
