In a major effort to assist military families experiencing financial hardship, the Department of Veterans Affairs (VA) has officially launched the VA Partial Claim Program. The new foreclosure-prevention initiative is designed to provide veterans and active-duty service members with a critical lifeline to bring their delinquent mortgages current without losing their existing low interest rates.
Authorized under the VA Home Loan Program Reform Act, the program opened for submissions to provide a crucial alternative to foreclosure for thousands of eligible primary-residence homeowners nationwide.
How the Partial Claim Program Works
The program targets veterans who fell behind on mortgage payments due to temporary financial setbacks, such as a job loss or medical emergency, but have since stabilized their income.
Instead of requiring the veteran to immediately pay back missed payments or forcing a full loan modification at today’s higher interest rates, the program restructures the overdue debt. Here is the framework:
The Trial Period: Mortgage servicers identify qualifying borrowers in default and place them on a mandatory three-month trial payment plan. Veterans must make three consecutive, on-time regular monthly payments to demonstrate financial stability.
The Advanced Cure: Once the trial period is successfully completed, the VA advances funds directly to the mortgage servicer to pay off the overdue balance, bringing the primary mortgage completely current.
The Subordinate Lien: The amount advanced by the VA becomes a zero-interest, zero-monthly-payment subordinate lien (essentially a second loan) attached to the property.
Veterans do not have to pay anything extra each month. The subordinate lien is only repaid later down the line when the home is sold, the mortgage is fully paid off, or the loan is refinanced.
Coverage Caps and Implementation Timeline
The VA can advance up to 25% of the unpaid principal balance of the loan to cure the delinquency. For veterans who experienced documented hardships during the COVID-19 relief window (between March 1, 2020, and May 1, 2025), that limit is extended up to 30%. The advanced funds can also encompass unpaid property taxes, homeowners insurance, and homeowner association (HOA) fees to fully clear any housing-related defaults.
“We are grateful for the creation of VA’s Partial Claim Program, which will help keep thousands of Veterans in their homes,” said VA Secretary Doug Collins. The program has been authorized for a five-year window, running through July 30, 2030. While submissions are officially open, private mortgage lenders and loan servicers have until November 28, 2026, to fully integrate the framework into their automated systems.
The initiative marks a massive expansion of the VA’s home retention suite. According to official data, the department worked successfully with mortgage servicers to help over 173,000 veterans avoid foreclosure through various existing avenues, including repayment plans, 30-year or 40-year traditional loan modifications, and disaster extensions.
Veterans facing financial difficulties are advised to contact their mortgage servicer’s loss mitigation department im
