VA Introduces New 'Last Resort' Loan Program to Help Roughly 40,000 Veterans Keep Their Homes

The Department of Veterans Affairs will launch a new program in May designed to help veterans who are in financial dire straits to keep their homes.

The Veterans Affairs Servicing Purchase program, or VASP, will serve as a "last resort" option for former service members who have defaulted on their home loans and aren't eligible for other VA loan assistance programs.

Under VASP, the VA will purchase delinquent loans from holders and become the primary loan servicer, providing borrowers a stable payment plan at a fixed rate of 2.5% for the remainder of their loan, according to VA Under Secretary for Benefits Joshua Jacobs.

The purpose, Jacobs said during a call with reporters on Tuesday, is for the program to serve as a safety net for an estimated 40,000 veterans at the highest risk for foreclosure and who "cannot resolve their delinquency through traditional VA home retention options."