A VA program that saved thousands of struggling veterans from losing their homes is being axed by the Trump administration.

Robert Johnson purchased a four-bedroom Texas home in 2022 when he was 49 years old and had four children. The senior tech employee lost his position in February 2024 but his seven-month mortgage payment struggle ended after using his severance funds. His new lower-wage job failed to provide enough income but the Veterans Affairs Servicing Purchase (VASP) program reduced his monthly payments from 5.5% to 2.5% which saved him $1500 each month. The VASP program stands as the only reason veterans would face homelessness according to Robert Johnson during his MarketWatch interview last month. The Veterans Affairs Servicing Purchase program has saved more than 17,000 veterans from foreclosure through loan purchases since May 31 of last year.

The Trump administration has decided to terminate the program. The VA announced that new enrollments into VASP will stop on May 1 while declaring the program an improper Biden administration action. The Press Secretary Pete Kasperowicz declared that the VA operates only as a service organization and not as a loan restructuring agency while confirming protection for current users and pre-May enrollees. No replacement’s been named. The foreclosure statistics from Intercontinental Exchange demonstrate that VA-backed loan foreclosure starts increased by 34% during February 2024 compared to the previous year while many veterans approach default.

The Mortgage Bankers Association head Bob Broeksmit predicts that removing VASP will lead to increased veteran foreclosures unless the government implements a “partial-claim” solution which allows skipped payments to be added interest-free to the end of a loan. The VA eliminated the partial-claim program in 2022 when they established the VASP program. The VA loan program and overall mortgage market face potential harm according to Republican representatives Mike Bost and Derrick Van Orden who support ending the VASP program. The lawmakers advocate for a permanent partial-claim system that will protect veterans while safeguarding taxpayer interests.

Real estate agent Chris Nolan who served as a Florida Marine observes that his veteran clients are increasingly anxious about their situation. His veteran clients who face employment challenges alongside loan default concerns because of current economic instability. He explained to MarketWatch that all homeowners are concerned about maintaining their property ownership. The disappearance of VASP without a suitable replacement creates a challenging path ahead for veterans.