Under current modification practices, approximately 63% of VA loan adjustments increased borrowers' monthly payments, compared to just 2% for Fannie Mae and Freddie Mac loans. The fallout has pushed monthly payments up by at least $150 for more than 15,000 veterans, while over 700 saw hikes exceeding $1,000. Although Congress created the Partial Claim Program to let borrowers retain original interest rates, the VA took over 13 months to outline the details. The upcoming replacement also offers no retroactive relief for individuals who have already accepted costly loan modifications.
Key points
Cancellation of the low-interest VASP program left financially distressed military borrow…: Cancellation of the low-interest VASP program left financially distressed military borrowers vulnerable to near 7% market interest rates.
Legislative remedies have suffered substantial implementation delays after the VA require…: Legislative remedies have suffered substantial implementation delays after the VA required more than 13 months to release program guidelines.
Veterans who already finalized costly loan modifications are entirely excluded from relie…: Veterans who already finalized costly loan modifications are entirely excluded from relief under the incoming replacement program.
Sources checked by our analysis pipeline: 1
NPR found that among veterans whose loans were modified after a financial hardship, more than 15,000 saw their monthly payment rise by at least $150. Over 700 saw an increase of $1,000 or more. About 63% of VA loan modifications raised the payment, compared with just 2% for loans backed by Fannie Mae and Freddie Mac.
Why VA loan payments went up after the VASP shutdown
The Veterans Affairs Servicing Purchase (VASP) programme was created under the Biden administration. It let veterans who had missed payments roll the dues into a new loan at a 2.5% interest rate. Tens of thousands of borrowers used it.This is how the Trump administration says thank you for your service.
— Governor Kathy Hochul (@GovKathyHochul) April 2, 2026
President Trump has signed Rep. Van Orden's VA Home Loan Program Reform Act into law!This bill will provide critical relief to veterans who have fallen on hard times, helping them stay in their homes and avoid foreclosure. 🇺🇸https://t.co/hWxi1BwO02
— Rep. Derrick Van Orden (@RepVanOrden) July 30, 2025
Mortgage industry groups had warned the government not to…
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