New VA Partial Claim Program: What Veteran Families Need to Know

Signed Into Law – July 30, 2025

On July 30, 2025, the President signed the VA Home Loan Program Reform Act into law—restoring and improving the Partial Claim Program to help veteran families keep their homes and avoid foreclosure.

At the KOVH Foundation, we know how confusing mortgage relief programs can be, especially during times of financial hardship. Here’s a clear breakdown of who’s eligible, what the program offers, and how to take the next step.

What Is the VA Partial Claim Program?

The VA Partial Claim Program allows the Department of Veterans Affairs to cover a portion of your missed mortgage payments by purchasing that part of your loan from your lender.

• That amount becomes a zero-percent interest lien on your home.

• You don’t make monthly payments on it.

• You repay it only when you sell, refinance, or pay off your mortgage.

The goal: Bring your loan current so you can stay in your home.

Who Is Eligible?

You may be eligible if:

1. You have a VA-backed home loan (VA-guaranteed mortgage).

2. You are behind on payments due to financial hardship.

3. Your loan is still in good standing with the VA (not foreclosed or transferred to another servicer).

4. The missed payments happened during certain dates:

   • Standard Eligibility: Missed payments after May 1, 2025 may qualify for up to 25% of your unpaid principal balance.

   • Special COVID-Era Eligibility: If you missed any payments between March 1, 2020, and May 1, 2025, you may qualify for up to 30% of your unpaid principal balance.

Why the Dates Matter

The higher 30% benefit is designed for families hit hardest by the pandemic and its aftermath.

Example:

• If you missed payments in January, February, April, or April 2025, those months count toward the 30% rule.

• If you also missed payments in June or July 2025, those months fall under the 25% rule.

How Much Help Can You Get?

• Standard Cap: Up to 25% of your unpaid principal balance.

• COVID-Era Cap: Up to 30% if you missed payments in the special window.

For many veteran families, this difference can mean thousands more in relief—enough to completely wipe out the delinquency and stop foreclosure.

Steps to Apply

1. Contact Your Loan Servicer Immediately

   • For most veteran families, this is Freedom Mortgage, LoanCare, PennyMac, or another VA-approved servicer.

   • Tell them you want to apply under the VA Partial Claim Program signed into law on July 30, 2025.

   • Mention if you have payments missed between March 1, 2020, and May 1, 2025 to trigger the 30% review.

2. Gather Documentation

   • Your mortgage statement.

   • Proof of financial hardship (job loss, medical expenses, deployment changes, etc.).

   • A payment history or delinquency notice from your servicer.

3. Ask Specific Questions

   • Am I eligible for the COVID-era 30% partial claim?

   • How much of my unpaid balance will be covered?

   • What will my new monthly payment be once the claim is applied?

Important Notes

• No Monthly Payment on the Lien – The VA’s lien sits quietly until you refinance, sell, or pay off the mortgage.

• Five-Year Program Window – The new law authorizes this program for five years from July 30, 2025, unless Congress extends it.

• Not Automatic – You must apply through your servicer and be approved.

KOVH Foundation’s Role

We’re here to:

• Help veteran families understand their rights.

• Connect you with free VA-approved housing counselors.

• Advocate with servicers if you’re being denied relief you’re entitled to.

If you or another veteran family you know is facing foreclosure or mortgage delinquency, don’t wait—the earlier you act, the more options you’ll have.

📩 Contact Us: www.keepourvetshoused.org