Bill H.R. 1815 Has Been Officially Approved by President
The VA Home Loan Program Reform Act, signed into law on July 30, 2025, brings a breath of fresh air to veteran homeowners facing financial hardship. Known as H.R. 1815, this significant piece of legislation introduces a partial claim loss mitigation solution to help prevent foreclosures among veteran homeowners [1][2].
The law empowers the Department of Veterans Affairs (VA) to advance funds to cover missed mortgage payments for veterans in default or at imminent risk of default. The partial claim amount is secured by a subordinate lien on the property, with repayment deferred until the home is sold, refinanced, or the original loan matures [1][2].
Key provisions of the Act include:
- The VA can pay loan holders an amount necessary to avoid foreclosure for a VA-loan secured primary residence, promoting parity with loss mitigation programs from other federal agencies such as FHA and USDA [2][4].
- The partial claim amount is capped at 25% of the unpaid principal balance, with a temporary increase to 30% for missed payments occurring between March 1, 2020, and May 1, 2025, addressing COVID-19-related hardships [2][3].
- Veterans are now allowed to pay real estate agents directly on VA loans, enhancing their competitiveness in markets where buyer-paid commissions are the norm [3].
- The Act increases funding to help homeless veterans transition into housing, partly supported by the Toxic Exposures Fund [3].
- It establishes clear loss mitigation procedures to reduce foreclosures and provide stronger protections and support for veteran borrowers and lenders alike [1][4].
- The legislation passed unanimously in both chambers of Congress, reflecting strong bipartisan support for veteran housing stability [3][4].
The law effectively modernizes and aligns VA loan servicing and foreclosure prevention tools with other federal housing programs, significantly expanding protections for veterans struggling to maintain homeownership, especially in the wake of the COVID-19 pandemic [1][2][3].
While the Act does not specify the exact actions the Secretary can take in the case of a defaulted loan, it does provide the Secretary of Veterans Affairs with new authorities to address certain situations involving defaulted home loans guaranteed by the Secretary [1][4]. However, it's important to note that the act has other purposes beyond authorizing actions for defaulted loans [2].
The VA Home Loan Program Reform Act of 2025 amends specific sections of title 38, United States Code, and is a significant step forward in ensuring the long-term financial stability of veteran homeowners [3]. This legislation underscores the commitment to supporting our veterans, providing them with the resources they need to maintain and build secure futures.
- The VA Home Loan Program Reform Act of 2025, signed into law on July 30, 2025, not only aims to help veteran homeowners in financial distress, but also aligns VA loan servicing and foreclosure prevention tools with other federal housing programs, as part of the policy-and-legislation landscape in general-news.
- The Act's passage in both chambers of Congress, reflecting strong bipartisan support, highlights the importance of politics in shaping legislation that benefits veteran homeowners, especially during challenging economic times like the COVID-19 pandemic.
