VA Home Loan Program Reform Act, marks a significant update to the VA Home Loan Program. This legislation restores foreclosure prevention tools and gives the Department of Veterans Affairs (VA) new authority to intervene when VA-backed home loans fall into delinquency.
Overview The Act establishes a new Partial Claim Program, mandates a standardized loss mitigation process, and temporarily increases funding for transitional housing services. It also directs VA to study how best to ensure Veterans are treated fairly in real estate transactions.
What the Act Provides Veterans
- Partial Claim Program Veterans with VA-backed home loans may now avoid foreclosure through a new partial claim option. Under this program, VA may pay up to 25% of the unpaid loan principal, or 30% for certain COVID-era delinquencies, to bring the loan current. In exchange, VA will hold a subordinate lien against the property.
- Standardized Loss Mitigation Procedures Before foreclosure or other remedies, loan servicers must offer Veterans a clearly defined series of options such as repayment plans, modifications, or partial claims. This sequence helps ensure transparency and consistency when borrowers fall behind.
- Real Estate Agent Representation The law directs VA to study and report within 90 days how to better support Veteran homebuyers in securing professional real estate representation, particularly as traditional buyer-agent compensation models change nationwide.
- Support for Homeless Veterans This increases funding for VA’s Grant and Per Diem Program, which supports transitional housing for homeless Veterans. It includes a temporary lift of certain funding caps.
Implementation Still to Come While the legislation gives VA clear authority to create the new partial claim option, the agency has not yet published official regulations or repayment terms. These administrative details will determine how the program functions in practice, including whether interest will be charged on partial claim advances.
Bottom line: H.R. 1815 is designed to help more Veterans avoid foreclosure without requiring refinancing, while also enhancing fairness and stability across the VA Home Loan Program. Veterans should stay in touch with their loan servicers as implementation details become available.
Brad Anderson and Melissa Crandall are the Lake County Veterans Service Officers and can be reached at 218.834.8326 or cvso@co.lake.mn.us
Karen Christianson is the Cook County Veterans Service Officer and can be reached at 218.387.3639, or karen.christianson@co.cook.mn.us
