An investigation by NPR has found that the Trump administration's decision to end a low-interest loan relief program has left thousands of military veterans facing sharply higher mortgage payments. Data obtained by NPR shows that 63% of veterans who received a loan modification saw their payments rise, compared with 2% of modifications to loans guaranteed by Fannie Mae and Freddie Mac. More than 15,000 veterans saw their payments jump by at least $150 a month, and over 700 saw increases of at least $1,000.
The VASP program was created by the Biden administration to help struggling veterans by rolling missed payments into a new mortgage at a low 2.5% interest rate. The Trump administration ended the program on May 1, 2025, amid House Republicans’ opposition. They warned it put taxpayers on the hook for thousands of loans, and Van Orden said he feared the VA home loan would not exist in the future.
“If the Biden version of VASP was allowed to continue, I fear that the home loan will not exist in the future for my fellow veterans,” Representative Derrick Van Orden (R-Wis.) said during a March 2025 hearing. Mortgage industry groups had warned that ending the program without a replacement would leave veterans with expensive loan modifications at higher interest rates, which they said could lead to foreclosures for those unable to afford the higher payments. “This was a foreseeable outcome of abruptly ending a program without a replacement in place,” said Matthew Douglas of the Housing Policy Council.
Army veteran Scott Boyd bought a house near Columbus, Ohio, using a VA loan. After losing his job and seeking treatment for PTSD, he fell behind on his mortgage. His lender told him that the VA had a forbearance program that would let him pause payments and catch up affordably. Instead, he was offered a loan modification that raised his monthly payment by nearly $1,200. “This is outrageous,” Boyd told NPR. “Everything that I've done for this country ... it's come down to, 'There's nothing we can do about it.'”
Representative Mark Takano (D-Calif.), the ranking member of the House Veterans' Affairs Committee, called the situation “the height of insanity.” He said the VA could put veterans back into lower-cost mortgages if it chose to. Committee Chairman Mike Bost (R-Ill.) and Rep. Van Orden issued a joint press release saying they had serious concerns over VASP’s impact and that the Trump administration had rightly ended the program. VA press secretary Quinn Slaven said in a statement that the VA helps thousands of veterans retain homeownership, and that the loan program is based on the premise that veterans generally must be able to make their mortgage payments.
Congress passed a bill to create a replacement, the VA Partial Claim Program (PCP), which allows veterans to defer missed payments. However, it took the VA more than 13 months to design and announce the new program, and most mortgage companies still do not offer it. The new program will not help veterans like Boyd, who are already locked into higher-cost modified loans. Foreclosures on VA loans have since risen to a 10-year high.
Analysis
Why This Matters
- The VA's program termination directly contradicts the goal of supporting veterans, leaving many worse off than before they sought help.
- The transition gap between VASP and its replacement exposed a systemic failure in government program management, affecting thousands.
- The inequity between treatment of VA loan modifications and conventional loans underscores a broken safety net for those who served.
Background
The VASP program allowed veterans behind on their mortgages to restructure their debt at a low 2.5% rate. Facing Republican criticism that it was too costly and risky for taxpayers, the second Trump administration terminated the program in May 2025. A replacement program, the VA Partial Claim Program (PCP), was created by Congress but took over a year to implement, leaving a gap thousands of veterans fell into.
Key Perspectives
Rep. Mark Takano (D-CA): Described the payment increases as "the height of insanity" and argued the VA has the authority to fix the problem.
Rep. Derrick Van Orden (R-WI): Criticised VASP as a threat to the entire VA home loan program and authored the bill for its replacement.
Matthew Douglas (Housing Policy Council): Representing major lenders, he said the payment increases for veterans were a "mathematical certainty" following the program's abrupt end.
Scott Boyd (Affected Veteran): Called it "outrageous" and said he feels defeated, describing the system as "so broken".
VA Press Secretary Quinn Slaven: Stated the VA is helping veterans avoid foreclosure and that the program requires veterans to generally be able to make their payments.
What to Watch
- Whether Congress takes action to retroactively assist veterans already stuck in the higher-cost modified loans.
- The rollout of the PCP program ahead of the Nov. 28 industry deadline and whether it effectively prevents further foreclosures.
- The trajectory of VA loan foreclosures, which have already hit a 10-year high since VASP was terminated.
Checked
12 claims in this story checked against 1 source: 12 supported.
Show each claim
- SupportedThe Trump administration ended the VA loan relief program, leaving thousands of veterans facing higher mortgage payments.LAist: “Thousands of military veterans with VA-backed mortgages have been hit with higher interest rates and monthly payments since last year, when the Trump administration shut down a low-interest program designed to help them.”
- SupportedNPR found that 63% of veterans who received a VA loan modification saw their payments rise, compared with 2% of modifications to loans guaranteed by Fannie Mae and Freddie Mac.LAist: “NPR found that 63% of veterans who received a loan modification were hit with a payment increase, compared with just 2% for modifications of loans guaranteed by the government-sponsored enterprises Fannie Mae and Freddie Mac”
- SupportedMore than 15,000 veterans saw their monthly payments increase by at least $150.LAist: “Among veterans who had their loans modified after a financial hardship, more than 15,000 saw their monthly payments increase by at least $150”
- SupportedMore than 700 veterans saw payment increases of at least $1,000.LAist: “More than 700 veterans suffered payment increases of $1,000 or more.”
- SupportedThe Biden administration created VASP to help veterans behind on payments by rolling missed payments into a new mortgage at a 2.5% interest rate.LAist: “The Biden administration created after its own VA home loan disaster. ... Before it was shut down, the VASP program was helping tens of thousands of veterans who had fallen behind on their home loan payments by rolling those missed payments into a new mortgage with a low 2.5% interest rate.”
- SupportedThe Trump administration ended VASP on May 1, 2025.LAist: “Despite the warnings, the Trump administration ended the VASP program on May 1, 2025”
- SupportedVan Orden said at a March 2025 hearing, “If the Biden version of VASP was allowed to continue, I fear that the home loan will not exist in the future for my fellow veterans.”LAist: ““If the Biden version of VASP was allowed to continue, I fear that the home loan will not exist in the future for my fellow veterans,” said Van Orden during a House Veterans' Affairs Committee hearing on March 11, 2025 .”
- SupportedMortgage and housing groups warned that ending VASP without a replacement would leave veterans with worse loan options, potentially leading to foreclosures for those unable to afford higher payments.LAist: “They said if the VA shut down the program before standing up a replacement, vets would be left with far worse options than other American homeowners. With interest rates up around 7%, they warned that the only option left would be a modified loan at the current higher rates, which would result in foreclosures for those who couldn't afford the higher payments.”
- SupportedMatthew Douglas said, “This was a foreseeable outcome of abruptly ending a program without a replacement in place.”LAist: ““This was a foreseeable outcome of abruptly ending a program without a replacement in place,” said Matthew Douglas, of the Housing Policy Council.”
- SupportedBoyd’s loan modification raised his monthly payment by nearly $1,200.LAist: “In Boyd's case, he is now stuck paying $1,181 more — every month.”
- SupportedTakano called the situation “the height of insanity.”LAist: ““This is the height of insanity,” said California Democratic Rep. Mark Takano, the ranking member of the House Veterans' Affairs Committee, after NPR shared its findings.”
- SupportedForeclosures on VA loans rose to a 10-year high after VASP was ended.LAist: “Foreclosures on VA loans rose to a 10-year high after VASP was killed, according to industry data.”