What the End of the VA Servicing Purchase Program Means for Struggling Veteran Homeowners
In April 2025, the U.S. Department of Veterans Affairs (VA) announced it would be ending its VA Servicing Purchase (VASP) program — a last-resort option that allowed the VA to purchase certain delinquent VA-backed loans from mortgage servicers and offer veterans affordable repayment terms. The program will stop accepting new applications after May 1, 2025, leaving many veteran homeowners without this critical safety net.
What Was the VASP Program?
The VASP initiative was designed to help veteran borrowers who were behind on their VA-backed mortgage payments, often due to hardships following the pandemic or rising interest rates. According to the VA there are approximately 75,000 VA borrowers who have missed three or more mortgage payments. Under VASP, the VA could buy the loan from the mortgage servicer and work directly with the borrower to create more manageable repayment terms — often including lower interest rates or extended loan periods. Currently the VA estimates that there are 17,000 veterans already in the VASP program.
Why Is the Program Ending?
The VA cited operational challenges and lack of servicer cooperation as reasons for winding down the program. While a replacement initiative is expected in 2025, many borrowers are now left in limbo — especially those currently struggling with unaffordable loan modifications or looming foreclosure threats.
How This Affects VA Borrowers and Veterans
Without VASP, many veterans may now be forced into:
- Loan modifications that don’t offer true relief
- Increased risk of foreclosure
- Damage to their credit reports due to missed or misreported payments
- Deceptive or noncompliant servicing practices by mortgage companies
It’s critical that veteran borrowers review their credit reports carefully during this time. Mortgage servicers are legally obligated to report payments accurately, and errors — such as missed payments that were never missed, or failure to report an approved modification — can significantly harm a veteran’s credit score and future loan eligibility.
Under the Fair Credit Reporting Act (FCRA), consumers have the right to dispute inaccurate or incomplete information with the credit bureaus. If a servicer reports your mortgage incorrectly, and fails to correct it after a proper dispute, you may be entitled to damages under the FCRA.
Protections for Active-Duty Military Personnel
Veterans who are currently on active duty or recently transitioned may also be protected by the Servicemembers Civil Relief Act (SCRA). This federal law provides additional safeguards, including:
- A 6% cap on interest rates for certain obligations
- Protections against default judgments
- Limitations on foreclosure or eviction proceedings
If you are actively serving and facing pressure from a mortgage servicer or lender, you may have rights under the SCRA that the servicer is required to honor.
Don’t Face It Alone — Contact a Consumer Protection Attorney
If you are a veteran or service member impacted by the end of the VASP program — or if you believe your mortgage servicer has:
- Mishandled your loss mitigation application
- Reported your payments inaccurately to the credit bureaus
- Violated the FCRA or SCRA
- Initiated or threatened foreclosure improperly
—you may have legal claims worth pursuing.
At our law firm, we represent veterans, servicemembers, and consumers in fighting back against unfair mortgage practices and credit reporting violations. Let us review your situation, evaluate your credit report, and help you take action to protect your home and your rights.
Contact us today to schedule a consultation. You served your country — now let us help serve you.