Over 10,000 Veterans Have Lost Their Homes Since the Trump Administration Shut Down a Key VA Mortgage Program

A federal safety net designed to help military veterans keep their homes was abruptly shut down last spring — and the consequences are now being felt by tens of thousands of families across the country. More than 10,000 veterans have lost their homes to foreclosure since May 2025, and another 90,000 are currently behind on their mortgages or already in the foreclosure process.

The crisis stems from the Trump administration's decision to eliminate a VA mortgage rescue program called VASP — the VA Servicing Purchase program — without having a replacement ready to go. Industry experts had warned the move would lead directly to foreclosures. It did.

"Foreclosure. Period. That's really where it's gonna come to," warned Elizabeth Balce, representing the Mortgage Bankers Association, at a March 2025 hearing before the House Committee on Veterans' Affairs. Less than two months later, the program was gone.

How Veterans Ended Up in This Position

The roots of this crisis stretch back to the COVID-19 pandemic. Like millions of other Americans, many veterans with VA-backed home loans took advantage of mortgage forbearance programs that allowed them to pause payments temporarily. They were told those missed payments would be deferred — moved to the end of their loan — rather than collected all at once.

But in October 2022, the Biden administration shut down the part of the VA's forbearance program that made that deferral possible. Suddenly, tens of thousands of veterans were told they owed a lump sum — often tens of thousands of dollars — immediately. For most, that was simply unaffordable. The only other option was refinancing at the new, much higher interest rates, which had climbed from around 3% to 7%, adding hundreds of dollars to monthly payments.

After NPR reported on the problem in late 2023, the VA halted foreclosures nationwide and began developing a fix. That fix — VASP — eventually gave more than 33,000 veterans new mortgages at a 2.5% interest rate, helping them stay in their homes.

Then the Trump administration took office and ended it.

On May 1, 2025, the VA shut down VASP with just one week's notice — catching mortgage servicers and even VA staff off guard. Veterans who were already enrolled kept their low-rate loans. But the door closed on everyone else, including thousands who were still working through the enrollment process.

"I found out that [VASP] was ending and I called the VA loan technician and they didn't even know yet," said Leann Ledford, whose husband is a Marine veteran injured in Afghanistan. "They had to go figure out what was going on."

"We should have something in place to try to stem people from losing their homes," said Steve Sharpe, an attorney with the nonprofit National Consumer Law Center.

Veterans Now Facing Harder Choices Than Other Homeowners

Without VASP, veterans who fall behind on their VA-backed mortgages now have fewer options than most other homeowners. Loans backed through Fannie Mae, Freddie Mac, or the FHA all include emergency assistance options that do not raise a borrower's interest rate or monthly payment. VA loans no longer offer that same protection.

With mortgage rates hovering between 6% and 7% over the past several months, many veterans who originally locked in rates of 3% or lower are being pushed into loan modifications that sharply increase their monthly costs. Their choices often come down to selling their home, accepting foreclosure, or agreeing to a significantly more expensive mortgage.

Army veteran Jon Henry of Kansas City, Mo., who served during the first Gulf War, ended up in a modified loan after losing his job managing a manufacturing plant. His monthly mortgage payment is now $380 higher than it was before.

"It's a struggle," Henry said. "Especially with everything else being inflated in the country, you know, with groceries, gas … I'm like, what the hell?"

Shante Benfatto, who served in Afghanistan and is rated 100% disabled by the VA, said she and her husband tried for months to get into VASP before it was suddenly shut down. They ultimately had no choice but to accept a loan modification with payments roughly $300 higher per month.

"It hurts paying $3,200 a month," Benfatto told NPR.

"We're paying late because we can't afford to pay the extra money until the end of the month, until she gets her disability," said her husband, Mark. Late fees add another $105 to their monthly bill.

Jerome Thomas, an Air Force veteran in Port Charlotte, Fla., saw his monthly payment jump by $800 after his interest rate more than doubled to 6.8%. He said his lender told him he had to accept the new terms or face foreclosure.

"I told them I can't afford to pay it," Thomas said. He's now falling behind on that modified loan and receiving foreclosure warnings. "I got my three kids in here, I've got the wife, she's a teacher … it's bad."

A New Program Is Coming — But Not Soon Enough for Many

The Trump administration says it is developing a new program that would allow veterans to move their missed payments to the back of their loan term, letting them keep their current mortgage and interest rate. For veterans with low rates, that could be a meaningful lifeline.

But the program is still months away from being operational. And housing advocates and the mortgage industry are raising concerns about how it is currently written.

Under the current draft, if a loan modification raises a veteran's monthly payment by up to 15%, mortgage companies would be required to place veterans into that more expensive loan — rather than offering them the option to defer missed payments and keep their original rate. That means a veteran with a $2,000 monthly payment could still be pushed into a loan costing $300 more per month, with no alternative offered.

"As drafted, Veterans will continue to have worse options than similarly situated non-Veterans," Pete Mills, an executive with the Mortgage Bankers Association, wrote in a letter to the VA.

"Payment reduction is the most important driver of modification performance, and the current policy will lead to higher redefault rates," Mills said. His organization, along with housing advocacy groups, is urging the VA to make higher-payment loan modifications an absolute last resort.

"The VA should restructure the waterfall to only allow increased monthly payments as a last resort," Mills said.

Advocates are also calling on the VA to ask the mortgage industry to pause foreclosures on veterans until the new program is ready. "We're talking about a heck of a lot of folks," said Sharpe, with the National Consumer Law Center.

Importantly, the new program will not help veterans like Thomas, Benfatto, or Henry who were already forced into higher-cost modified loans. It will not reduce their payments back to previous levels.

One Family's Story

Leann Ledford and her family in Spokane, Wash., represent what can happen when these systems fail. Her husband, a Marine with PTSD and a traumatic brain injury sustained in Afghanistan, spent years unable to work while the couple waited for his VA disability paperwork to be processed. At one point, the family of three lived out of a trailer for six months.

When they finally got back on their feet, they bought a house in January 2021 using a VA loan. The home sat directly across from their son's elementary school. For the first time in years, life felt stable.

"He's been able to live over half his life in our house now, and he doesn't remember all the bad years 'cause he was too little," Ledford said of her son.

But in 2022, after replacing their furnace and facing other costly repairs, their lender — Freedom Mortgage — told them they could enroll in a forbearance program to pause payments temporarily.

"They told us it was for a year, and they would check in after six months," Ledford said. "And then we would just pick up our payments at the end of the year … It felt like such a relief for us."

She says they were told the missed payments would be moved to the back of the loan. Instead, when the Biden administration shut down that deferral option in October 2022, the Ledfords were told to pay everything back immediately.

"And we're like, wait a minute, what?" Ledford recalled.

They spent the following years applying for relief through the VA's loss mitigation process — a process that dragged on without ever producing an actual solution. They were not permitted to simply resume making their regular mortgage payments. VASP could have helped them. The VA's new upcoming program could have helped them. But neither was available in time.

"We didn't know that the foreclosure sale went through until somebody knocked on the front door," Ledford said.

Freedom Mortgage sold their home in a foreclosure sale. It is now owned by the VA. The only offer the Ledfords have received is $3,500 to vacate — a so-called "cash for keys" arrangement — with a deadline of April 3 to leave.

The Ledfords receive $3,971 per month in disability pay. They say they could have afforded payments under VASP, or under the VA's forthcoming program had it been available. Instead, they are being asked to leave the home their son has grown up in.

Ledford's husband has been having seizures again. "It has really impacted him, and he is really struggling," she said.

The VA said in a statement: "VA worked tirelessly with the Ledford family to help keep them in their home. However, they were nearly four years behind on their mortgage payment, and the decision to foreclose on their mortgage was made by Freedom Mortgage." VA press secretary Pete Kasperowicz also wrote, "Per federal law, VA's 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." Freedom Mortgage declined repeated requests for comment.

The VA did not respond to questions about whether it could intervene on the Ledfords' behalf, given that the agency now owns the home. In its statement, the VA said it stands ready to assist the family with health care services.