VA support program to buy up veterans’ defaulted home loans

Starting next month, Veterans Affairs officials will offer a “last-resort” program for tens of thousands of veterans in danger of losing their homes because of post-pandemic mortgage problems, leaders announced Wednesday.

The new Veterans Affairs Servicing Purchase (VASP) program, which launches May 31, will allow the department to purchase defaulted VA loans from outside mortgage servicers, then modify the terms to allow financially strapped veterans to avoid losing the properties.

Borrowers will be guaranteed a fixed 2.5% interest rate for the remainder of their loans.

“This program will help ensure that when a veteran goes into default, there is an additional affordable payment option that will work in a higher-interest rate environment, so they can keep their homes,” VA Undersecretary for Benefits Joshua Jacobs said.