After the VA Ended a Low-Rate Rescue Program, More Than 15,000 Veterans Were Moved Into Costlier Loans, NPR Finds

Thousands of military veterans with VA-backed mortgages have been put into higher-interest loans with higher monthly payments since the Trump administration ended a low-interest program designed to help them catch up, according to an NPR investigation published Friday.

Among veterans who had their loans modified after a financial hardship, more than 15,000 saw their monthly payments rise by at least $150, NPR found, using previously unreported data it obtained from the Department of Veterans Affairs. More than 700 saw increases of $1,000 or more.

A loan modification changes the terms of a mortgage so a homeowner who has fallen behind can catch up. For most Americans, NPR reported, a modification lowers the payment or keeps it the same. For VA loans, it has not. NPR found that 63% of veterans who received a modification had their payment go up, compared with 2% of modifications of loans backed by Fannie Mae and Freddie Mac, which cover most of the U.S. mortgage market.

The program at the center of the story was the Veterans Affairs Servicing Purchase program, known as VASP, which the Biden administration created. It helped tens of thousands of veterans who had fallen behind by rolling their missed payments into a new mortgage at a 2.5% interest rate, according to NPR. The Trump administration ended it administratively on May 1, 2025, without a vote in Congress. House Republicans announced the move before the VA did.

"We — along with many of our colleagues — had serious concerns about the impact VASP would have on not only the future of VA's home loan program, but the mortgage lending business as a whole," Rep. Mike Bost of Illinois, chairman of the House Veterans' Affairs Committee, and Rep. Derrick Van Orden of Wisconsin said in a joint release at the time. Van Orden had warned at a March 2025 hearing that if VASP continued, "the home loan will not exist in the future for my fellow veterans." Republicans argued the program put taxpayers on the hook for loans to veterans who had trouble paying.

The mortgage industry and housing groups had warned, at that hearing and in letters, that ending VASP before a replacement was ready would leave veterans with only modified loans at current rates, near 7%, and would lead to foreclosures, NPR reported. "This was a foreseeable outcome of abruptly ending a program without a replacement in place," said Matthew Douglas of the Housing Policy Council, which represents the largest mortgage companies. "It's a mathematical certainty that borrowers are going to have those kind of shocking payment increases."

A replacement exists on paper. Congress, with broad bipartisan support, passed Van Orden's bill creating a VA Partial Claim Program, which lets veterans move missed payments to the back of the loan and keep their original mortgage. But NPR reported that it took the VA more than 13 months to design and announce the details, which it did in June, and the industry was given another 180 days to implement it, with a deadline of Nov. 28. Most mortgage companies still do not offer it. The new program does not help veterans already moved into higher-cost modified loans.

NPR profiled Scott Boyd, an Army veteran near Columbus, Ohio, who bought a home in 2021 with a VA loan at 2.75%. After losing his job in a mass layoff and seeking treatment for PTSD, he fell behind. His lender had told him VASP would be available, but it was ended. His modification raised his rate to 6.75% and extended the loan to 40 years, increasing his payment by $1,181 a month. Two weeks after he signed, the VA launched the partial claim program that would have let him keep his original terms. "I really felt hurt more than anything," Boyd said. "I was just like, I felt so defeated."

Rep. Mark Takano of California, the committee's ranking Democrat, called the findings "the height of insanity." "These are veterans that are already financially distressed," he said. He told NPR the VA could move these veterans back into lower-cost mortgages if it chose to, or Congress could require it.

The VA said in a statement that it helps thousands of veterans "retain homeownership and/or avoid foreclosure through programs like payment forbearance, loan modifications and individualized repayment plans." Press secretary Quinn Slaven wrote that "many leading voices in Congress supported the termination of VASP, which put the entire VA home loan program at risk," and that the home loan program "is based on the premise that while Veterans may need some assistance, they must generally be able to make their mortgage payments." Bost and Van Orden did not respond to NPR's requests for comment.

Foreclosures on VA loans rose to a 10-year high after VASP ended, according to industry data cited by NPR, and experts at a congressional roundtable in September warned of a wave of foreclosures still to come. Industry groups say raising a struggling borrower's payment makes another default more likely.

Still unknown: how many of the 15,000 veterans have since defaulted again, and whether the VA or Congress will act to lower their payments.