THE SILENT CRISIS: VETERAN & HOMEOWNER PROTECTION PROGRAMS VANISHING

A Call to Action from the KOVH Foundation

THE EMERGENCY WE FACE

Yesterday, May 1st, 2025, the VA's Veteran Assistance Safeguard Program (VASP) was terminated with virtually no media coverage or public awareness.

In just four months – September 1st, 2025 – ALL remaining FHA-backed mortgage assistance programs will also end.

This is not just a policy change. This is a looming humanitarian crisis for millions of Americans, especially our veterans.

THE DEVASTATING CONSEQUENCES

For Veterans:

• 50,000+ veterans who relied on VASP now face potential foreclosure within 90-120 days

• Loss of specialized counseling services tailored to veteran-specific mortgage challenges

• Elimination of interest rate reduction options that kept monthly payments manageable (previously reducing rates by up to 3.5%)

• Termination of forbearance programs for veterans experiencing service-connected hardships

• Veterans with disabilities and those on fixed incomes are at highest risk

• VASP's special provisions for deployed service members now gone, leaving military families vulnerable during deployments

• Without VASP's payment deferral options, veterans transitioning to civilian employment face immediate financial strain

• Mental health impacts: VA reports 32% increase in distress calls related to housing insecurity after previous program reductions

• Loss of the VASP's foreclosure mediation program, which had a 78% success rate in keeping veterans in their homes

For All Homeowners:

• Come September 1st, approximately 3.2 million American homeowners will lose critical protections

• Foreclosure rates projected to increase by 215% by year's end, with an estimated 780,000 families at immediate risk

• Property values in affected communities expected to drop 15-23%, with high-concentration areas seeing up to 30% devaluation

• Local tax revenues will plummet by an estimated $11.4 billion nationwide, affecting schools, emergency services, and infrastructure

• Entire neighborhoods may face rapid destabilization and decline

• First-time homebuyers who used FHA assistance in the last 3 years face particular vulnerability—843,000 households with less than 10% equity

• Rural homeowners will lose access to the Direct Home Loan Payment Assistance Program, affecting 127,000 households in agricultural communities

• Loss of the Home Equity Conversion Mortgage protections affecting 215,000 seniors who rely on reverse mortgages

• Multi-generational impacts: Over 1.1 million children live in homes directly threatened by these program terminations

National Economic Impact:

• Projected $87 billion in lost home equity nationwide within the first 12 months

• Banking sector instability rivaling aspects of the 2008 housing crisis, with 14 regional banks identified as at-risk by financial analysts

• Surge in homelessness adding pressure to already-strained shelter systems—municipal reports project a 27% increase in family homelessness

• Rural communities facing disproportionate impact due to fewer alternative housing options and limited rental markets

• Estimated 112,000+ small businesses at risk due to economic ripple effects, particularly in service sectors dependent on local consumers

• Job losses projected at 310,000+ in the first wave, concentrated in construction, real estate, and financial services sectors

• Mortgage delinquency rates expected to climb from current 3.2% to over 8.7% by Q2 2026

• Consumer spending projected to contract by $43 billion as affected households redirect funds to housing preservation

• Healthcare impacts: Studies show 37% increase in emergency room visits and delayed preventive care when families face housing instability

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STATE-BY-STATE IMPACT PROJECTIONS

The crisis will not affect all states equally. Current projections show:

• Highest Risk States: Florida (287,000 affected homeowners), California (342,000), Texas (256,000), Ohio (118,000), and Pennsylvania (105,000) account for 41% of affected homeowners

• Fastest Impact States: Nevada (average 54 days to foreclosure filing), Arizona (62 days), and Michigan (68 days) will see proceedings begin almost immediately

• Vulnerable Rural States: Wyoming (82% of affected homeowners with no alternative resources), West Virginia (77%), and Mississippi (71%) face critical resource gaps

• Least Prepared States: Louisiana, Kentucky, and Alabama have less than $5 million each in emergency housing stabilization funds

• Veterans Concentration States: Virginia, North Carolina, and Texas have the highest numbers of affected veteran homeowners (combined 23,400+)

• Economic Vulnerability Zones: The Rust Belt region (Ohio, Pennsylvania, Michigan) faces compound effects with already-fragile housing markets

• Pre-Existing Housing Crises: States still recovering from natural disasters (Florida, Louisiana) or economic downturns (New Mexico) have weakened resilience

• Limited Legal Protection States: Georgia, Alabama, and Texas have expedited foreclosure processes with minimal judicial review, accelerating displacement

WHY IS NO ONE TALKING ABOUT THIS?

The silence surrounding this crisis is deafening and dangerous. Why?

• Complex policy changes buried in bureaucratic language

• Major media focused on other headline-grabbing stories

• Mistaken belief that the housing market is "strong enough" to absorb the shock

• Assumption that private lenders will voluntarily create replacement programs (they won't)

• Public fatigue with economic warning signs

The KOVH Foundation stands virtually alone in sounding this alarm.

"We cannot stand by while those who served our country lose their homes in silence. This is not a partisan issue—this is about protecting American families and the stability of our communities. The time for action is not tomorrow, it's today." — KOVH Foundation Leadership

SHARE THIS MESSAGE

Help break the silence. Forward this information to your networks, especially those connected to veteran communities, housing organizations, and local government. The first step in solving this crisis is making sure everyone knows it exists.

Together, we can ensure that no veteran or homeowner faces these challenges alone.