The Department of Veterans Affairs is ending the Veterans Affairs Servicing Purchase Program (VASP), which was established to assist veterans struggling with mortgage payments. This has raised concerns among housing advocates and congressional Democrats, who fear an increase in foreclosures without a replacement program. The VA has defended its decision, stating that it is not designed to be a mortgage restructuring service, and has highlighted other available assistance programs. Republican lawmakers propose a partial claims program as an alternative, offering interest-free loans to cover unpaid payments. Meanwhile, organizations like the Veterans of Foreign Wars are urging veterans to take action before the program's phase-out deadline.

The VA's VASP program, introduced in May 2024, helped veterans avoid foreclosure by purchasing and modifying troubled loans, reducing interest rates, and has aided over 17,000 veterans with loans worth more than $5.48 billion.

Housing advocates and Democrats express concern over the potential rise in veteran foreclosures following the end of VASP, citing a lack of alternative options for those in financial distress.

The VA plans to phase out VASP as part of a larger reduction in force, targeting approximately 70,000 agency employees for termination, and claims it is not intended to function as a mortgage restructuring service.

Republican lawmakers support the program's conclusion and propose a partial claims program, offering interest-free loans for unpaid payments, aiming to protect taxpayers while assisting veterans.

Democrats argue the phase-out is premature without a viable replacement, accusing the VA of risking unnecessary veteran foreclosures, which they consider contrary to the benefits veterans have earned.

The VA assures existing participants will not be affected and points to other housing assistance programs, while the Veterans of Foreign Wars advises members to communicate with lenders before the phase-out deadline.

The Center for Responsible Lending highlights the risk of foreclosure for tens of thousands of veterans, noting that as of February 2025, about 81,000 veterans were already in default, having missed multiple mortgage payments.