Scott Boyd bought his VA-financed home near Columbus, Ohio, in 2021. After a mass layoff and a struggle with PTSD left him behind on payments, he got a loan modification meant to help him keep the house. Instead, his monthly payment jumped by $1,181, and his interest rate rose from 2.75% to 6.75%.
Boyd is one of more than 15,000 veterans who received post-hardship loan modifications and saw their monthly payments rise by at least $150, according to an investigation by NPR. More than 700 of those veterans saw increases of $1,000 or more, and 63% of veterans who got modifications experienced some kind of payment hike, the investigation found. By comparison, loan modifications on Fannie Mae and Freddie Mac-guaranteed mortgages had only a 2% payment-increase rate, per the same investigation.
The root of the problem, per the NPR report, traces back to the Trump administration's decision to end the Veterans Affairs Servicing Purchase Program on May 1, 2025, without a congressional vote. VASP had offered veterans behind on their mortgages a new, VA-owned loan at a 2.5% interest rate — a rescue mechanism that, as NPR reported separately, had already extended to more than 33,000 veterans by early 2025. The Center for Responsible Lending confirmed the VA stopped accepting VASP submissions effective that date.
A Program Ended Despite Warnings
Mortgage industry and housing groups warned the administration not to end VASP before a viable replacement existed, according to the dossier of reporting underpinning the NPR story. Those groups estimated interest rates at the time were around 7%, and cautioned that pushing veterans into modified loans at those rates could make payments unaffordable and drive foreclosures. The administration ended VASP anyway, after those warnings that no replacement was ready, per the reporting.
House Republicans opposed VASP during the spring of 2025. At a March 11, 2025 hearing, Rep. Derrick Van Orden warned that continuing the program could threaten the future availability of VA home loans altogether. Van Orden and Rep. Mike Bost later announced their support for ending VASP in a joint press release. Congress ultimately passed a bipartisan bill directing the VA to create a replacement program.
Without VASP, veterans needing help were instead funneled into standard loan modifications — a process Military.com describes as one that often increases payments in today's rate environment, because missed payments get capitalized and the interest rate resets to current market levels. That is effectively what happened to Boyd: his mortgage payment now covers more than 90% interest, compared with about half going to principal before the modification, and his loan term stretched to 40 years.
“I Felt So Defeated”
Boyd described the emotional toll of watching his payment balloon. “I really felt hurt more than anything. I wasn't angry. I was just like, I felt so defeated,” he said, in comments reported by NPR.
Rep. Mark Takano, the California Democrat who serves as ranking member of the House Veterans' Affairs Committee, did not mince words about the situation. “This is the height of insanity,” Takano said. He added that the VA or Congress could still act to put affected veterans into lower-cost mortgages, or pass a law requiring it.
The VA has said it helps veterans retain homeownership or avoid foreclosure through forbearance, loan modifications and individualized repayment plans. Separately, foreclosures on VA loans rose to a 10-year high after VASP ended, and a prior NPR report from this spring found more than 10,000 veterans had already lost their homes to foreclosure since the program's shutdown, with roughly 90,000 more behind on payments or in the foreclosure process at that time.
A Replacement Arrives, Too Late for Some
The Department of Veterans Affairs announced details of its replacement, the Partial Claim Program, in June 2026, and formally launched it on June 15, 2026, according to the National Association of Realtors. Unlike a loan modification, the partial claim removes a borrower's delinquency without changing the interest rate, remaining loan term or payment amount, according to Military.com. It instead allows eligible veterans to move missed payments to the end of their loan term — generally up to 25% of the unpaid principal balance, or 30% for certain COVID-era cases — while keeping their original mortgage intact. That deferred amount becomes a subordinate lien, repaid only when the home is sold, refinanced, or the original mortgage is paid off, per Military.com.
The VA launched the Partial Claim Program just two weeks after Boyd signed his loan modification — timing that meant the new, friendlier option came too late to help him. The program does not help veterans already placed into higher-interest modified loans, per the reporting. The first mortgage company began offering access to the program two months after its launch, and the mortgage industry was granted another 180 days to implement it. Most mortgage companies still offer no access to the Partial Claim Program, and the VA has set November 28, 2026, as the industry's deadline to fully implement it, a timeline also confirmed by Consumer Finance Monitor.
The VA has said it expects the new approach to reduce forced sales and strengthen long-term housing stability for veteran homeowners. For veterans like Boyd, whose modifications were finalized in the gap between VASP's end and the Partial Claim Program's rollout, that promise offers little relief from payments that have already reset for decades to come.
