VA Foreclosure Relief in 2026: What Homeowners Need to Know After VASP Ends

A new program has been launched by the United States Department of Veterans Affairs to help veterans facing mortgage foreclosure. The new program is the Veterans Affairs Servicing Purchase (VASP) program.

Keep reading to learn more about the mortgage foreclosure process, including your options if you are facing foreclosure, and the VASP program, such as mortgage deferment and mortgage forbearance options.

Updated on March 16, 2026.

By Alexander Hernandez, J.D., Professor, and Author of Consumer Bankruptcy Law (Routledge).

Key Takeaways: VA Foreclosure Relief (2026 Update)

• VASP is Closed: The Veterans Affairs Servicing Purchase (VASP) program, which famously offered 2.5% interest rates, officially stopped accepting new applications on May 1, 2025. No Replacement Program exists yet.
• There is No Partial Program: Despite online rumors, the VA Home Loan Program Reform Act did not create a new Partial Claim program. Congress only granted the VA authority to design one in the future. As of 2026, no such program is active, and servicers cannot offer it.
• The 120‑Day Rule: Federal law generally prevents a servicer from filing a foreclosure until you are more than 120 days delinquent. This four‑month period is the best time to pursue a modification before legal fees and attorney involvement escalate the case.
• The 90‑Day Deadline: Once a borrower hits the third missed payment, files typically transfer from customer service to the servicer’s legal department. Negotiation becomes significantly harder.
• Foreclosure Timelines: How fast a foreclosure winds through the system varies per county. Chapter 13 immediately stops the sale through the Automatic Stay and allows arrears to be repaid over 3–5 years, often interest‑free.

VASP Is Closed — And There Is No Replacement Program Yet

The VA stopped accepting new VASP applications on May 1, 2025. Borrowers already in approved Trial Payment Plans are allowed to finish under the wind‑down rules, but no further applications are being accepted.

A common misconception is that the VA Home Loan Program Reform Act created a new, permanent Partial Claim program to replace VASP. That is incorrect.

Here’s the truth:

• The Act gave the VA authority to develop a future Partial Claim–style tool.
• The VA has not implemented such a program.
• Servicers cannot offer Partial Claims today.
• No guidance, forms, or operational procedures exist under Congress or the VA.

Professor’s Note: As of 2026, veterans are limited to standard VA loss‑mitigation options
such as repayment plans, forbearance, and traditional loan modifications.

Your 120‑Day Window Before Foreclosure

Federal law generally prevents a servicer from filing the first foreclosure action until you are more than 120 days delinquent. This four‑month period is critical. During this window, you can:

• Request a loan modification.
• Negotiate directly with your servicer.
• Avoid attorney involvement and legal fees.

Once the foreclosure is filed, the process becomes more expensive and complicated.

Trial Payment Plans Are Now Standard

Under current VA guidelines, most servicers require a three‑month Trial Payment Plan (TPP) before finalizing any modification. This is the VA’s way of ensuring the borrower can sustain the mortgage long‑term. Trial periods are the norm with lenders. It’s not a law nor a special program.

Saving Your Home From Foreclosure

Foreclosure timelines vary dramatically from one county to the next. High‑volume jurisdictions often have months‑long backlogs, giving homeowners more time to negotiate. Understanding your local court’s pace can determine whether you have weeks or months to act.

Protect Your Home with Chapter 13 Bankruptcy

If your servicer denies a mortgage modification and proceeds with foreclosure, Chapter 13 bankruptcy remains the most powerful tool available to veterans. With Chapter 13, you can immediately stop the foreclosure because of the Automatic Stay.

Chapter 13 allows you to catch up with your payments, repaying the arrears over 3–5 years. You could also reduce your interest rates, and if you have a second mortgage, you could potentially wipe it out as well.

To learn more about using Chapter 13 to eliminate your second mortgage or reduce your car loan balance, read this article.

The Professor’s Conclusion

The end of VASP has left many veterans without the mortgage relief options they relied on during the pandemic era. While Congress has authorized the VA to explore future Partial Claim options, no such program exists today. Until the VA issues new guidance, veterans must rely on traditional loss‑mitigation tools or Chapter 13 bankruptcy.

If you’re behind on your VA mortgage, the most important step is to act early. The sooner you engage with your mortgage loan servicer or a qualified bankruptcy attorney, the more options you’ll have to save your home.

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Updated initially on February 11, 2025.