Veterans Lose Homes as VA Relief Ends and Housing Plans Stall

US News Reporter

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Thousands of veterans are facing growing pressure in the housing market as foreclosures rise on VA-backed home loans and promised new housing for homeless former service members remains uncertain.

More than 10,000 veterans have lost their homes since May 2025, when the Department of Veterans Affairs (VA) ended a major foreclosure prevention program, according to industry data cited by NPR. At the same time, another 90,000 veterans are either behind on mortgage payments or already moving through the foreclosure process.

The financial strain for some veterans comes as questions grow around a separate VA pledge to expand housing for homeless veterans in Los Angeles.

VA Foreclosure Program

VA-backed home loans are designed to make homeownership more accessible for veterans, active-duty service members and some surviving spouses. Rather than lending directly, the VA guarantees part of the mortgage issued by private lenders, allowing borrowers to access benefits such as no down payment, lower interest rates and no private mortgage insurance.

But when borrowers fall behind, the system becomes far less forgiving.

The VA offered a COVID-era partial claim option between 2021 and 2022, helping struggling borrowers catch up on missed payments. A temporary solution followed through the Veterans Affairs Servicing Purchase program (VASP), which purchased delinquent loans from servicers and modified them at a 2.5 percent fixed rate. That program ended to new applicants on May 1, 2025, but those with loans approved before that date were unaffected.

After VASP expired, many veterans had few realistic ways to avoid foreclosure. In many cases, the only available option was rolling missed payments into the existing loan balance while resetting the mortgage to current market interest rates, often leading to significantly higher monthly payments.

NPR reported that nearly 90,000 VA loans are seriously delinquent, with 33,000 already in foreclosure. Since the expiration date, more than 10,000 veterans have lost their homes through foreclosure sales, while tens of thousands more remain at risk. It is not clear how many of those veterans might have avoided foreclosure under the rescue plan.

A spokesperson for the VA told Newsweek: "VA programs saved 173,000 Veterans from losing their home last year, and VA programs typically help about 100 to 200k Veterans each year."

"The number of Veteran foreclosures NPR reported is in line with many recent years and is actually lower than many of those years in which VASP was not in effect."

VA Moves To Help Veterans

Congress has moved to restore a more stable option for those facing the potential loss of their homes. President Donald Trump signed the VA Home Loan Program Reform Act into law on July 30, 2025, creating a new partial claim program intended to help veterans stay in their homes without losing the low mortgage rates many locked in during the COVID-19 pandemic.

"This bill seeks to help veterans who are struggling to catch up due to high interest rates in the current market, which makes refinancing difficult and puts them at-risk of losing their home, while still protecting the taxpayers’ investment in the VA home loan program," the bill text reads.

Under the law, the VA can advance funds to cover missed mortgage payments and bring the loan current. That amount becomes a subordinate lien attached to the property, with no monthly payment required. Veterans repay it only when they sell, refinance or pay off the mortgage.

The program can cover up to 25 percent of the loan balance, or 30 percent for borrowers who previously used a COVID-era partial claim, and applies to primary residences already in default or at imminent risk of default.

The major advantage is that borrowers can keep their original mortgage terms. Veterans who secured rates as low as 2.5 percent or 3 percent do not have to refinance into today’s much higher market rates just to catch up.

Still, August 2025 research from the Urban Institute noted that the program does not reduce principal balances or provide ongoing payment subsidies. It helps borrowers get current, but veterans whose income has permanently declined may still struggle to afford future payments.

The law, which passed unanimously in both chambers of Congress, is authorized for five years.

Housing Squeeze in California

An executive order from Trump, signed in May 2025, ordered the VA to work toward providing housing for 6,000 veterans at the VA West Los Angeles campus. California has more than 1.8 million veterans, the largest veteran population of any state. Los Angeles alone had around 3,000 homeless veterans in 2024, according to the White House, the highest total of any U.S. city and roughly 10 percent of all homeless veterans nationwide.

The order directed VA officials to, “within 120 days of the date of this order, present an action plan to the President, through the Assistant to the President for Domestic Policy, to meet these directives and restore the capacity to house up to 6,000 homeless veterans at the National Center for Warrior Independence by January 1, 2028.”

But the VA’s latest budget proposal to Congress does not request funding for any new housing. It does detail several ongoing housing unit developments on the site that have been ongoing since 2017. A VA official familiar with the matter told Newsweek that the department will soon release proposals for 500 to 1,000 additional housing units on the site, with more to come over the course of this administration.

A spokesperson for the VA told Newsweek that "President Trump’s FY2027 budget request gives us the funding we need to begin this work, and in the coming weeks, VA will release a request for proposals detailing our plans to establish hundreds of additional housing units, with more to follow once the proper infrastructure is in place."

"VA has also been fighting to reclaim sections of the campus that were irresponsibly leased and licensed to private companies—decisions that flouted the original intent of this campus, which was to help America’s Veterans," they continued.

In the budget, the department is seeking $500 million to renovate six older buildings, construct an 800-space parking garage and upgrade infrastructure. Another three projects would be funded by redirecting $212 million from earlier authorizations, including work on the aging Wadsworth Chapel, which is the oldest building on the campus, dating to 1900.

The proposal would also require around 330 current residents in treatment programs to relocate while the four buildings housing those services are renovated. Details are unclear about where they would stay temporarily or how long the displacement would last.

“I don’t think that plan puts the well-being of veterans first,” Anthony Allman, executive director of the nonprofit Vets Advocacy, told the Los Angeles Times. “We can create a plan that builds new facilities while not disrupting current treatment programs.”

VA Record on Veteran Homelessness

The VA has made broader progress on homelessness nationwide. In November 2025, the VA announced it had permanently housed 51,936 homeless veterans during fiscal year 2025. That was 4,011 more than the previous year and marked the agency’s strongest performance since it began tracking the number of individual veterans housed rather than total placements.

In May 2025, the department also launched “Getting Veterans Off the Street,” a nationwide effort focused on reaching veterans experiencing unsheltered homelessness. In the fall of 2025, it announced that $84 million in grants would go to organizations helping tackle homelessness among veterans.

Recent survey results released by the VA show that 82 percent of veterans who used its services, not limited to housing programs, in the first quarter of fiscal year 2026 trust the department to uphold the nation’s commitment to them—the highest level recorded since the agency began tracking trust nearly a decade ago.

Are you a veteran struggling with homelessness or facing the loss of your home? Get in touch at [email protected].

Update 05/02/2026 11:25 a.m. ET: This story has been updated to clarify that it is not clear how many veterans might have avoided foreclosure under VASP.

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