Jon Henry served in Iraq during the first Gulf War, in a unit meant to counter chemical warfare attacks. Luckily for him the attacks never happened, but he still earned full veterans benefits, including a home loan backed by the Department of Veterans Affairs.
Henry, who lives outside Kansas City. Mo., fell behind on his mortgage after losing his job managing a manufacturing plant last October. And because of a move last month by the VA, vets like him with delinquent loans have far worse options than most other American homeowners who never served.
"My social media posts have not been nice to the director of the VA and have not been nice to Trump," Henry said. "And I voted for the guy!"
Henry was hoping to get help from the VA Servicing Purchase program, or VASP. In just the past year, according to the VA, it has helped more than 33,000 veterans and servicemembers who got behind on their loans by giving them a new, low-interest-rate mortgage.
But last month, out of fear of the potential cost, the VA abruptly did away with this safety net. It was the latest development in a VA mortgage saga that has whiplashed veterans between various enacted and cancelled programs and left thousands in fear of losing their homes. There are about 80,000 vets in the U.S. behind on their mortgages and heading toward foreclosure, according to data from ICE Mortgage Technology.
"It's like, damn, you keep talking big about how you're doing all this for the veterans, but you just turned your back on 80,000 vets that have VA loans," Henry said.
Both Democrats and Republicans in Congress are questioning this move by the VA. And NPR has heard from more than 50 veterans around the country in recent weeks who say they are upset.
"I'm constantly terrified every day that some giant moving truck or some people are just gonna show up on the front door and kick us out and start throwing all of our stuff out of the house," said Mason Reale, a former Navy sonar technician in Lake Wales, Fla.
"It's infuriating and it's devastating," Matthew Kelly, a retired Navy Special Operations diver in San Antonio, Texas, told NPR.
The VA said in a statement to NPR that it "has a long-standing history of exploring options for Veterans to retain their homes."
But the VASP program was created as a crucial last resort to keep veterans in their homes. Current mortgage rates of around 7 percent mean the other option for a VA loan, a loan modification, often sharply raises the monthly payment, making it unaffordable. So without VASP, many veterans will have to choose between selling the house, or getting foreclosed on.
That leaves vets in a worse position than most other homeowners. Mortgages backed by the government either through Fannie Mae, Freddie Mac or FHA all have emergency options for delinquent borrowers that don't raise their interest rate or monthly payment. But that's not true anymore for veterans with loans backed by the VA, now that it's closed enrollment into VASP.
When VA secretary Doug Collins appeared before a U.S. Senate committee in May, he heard about it — and mostly from Republican lawmakers.
" I was just with a press conference back home with reporters back home," Republican Sen. Bill Cassidy of Louisiana told Collins. "They asked me about the VA servicing purchase program or VASP."
Cassidy cited NPR's reporting and asked about the VA "leaving veterans in the lurch."
Collins stood behind the VA's decision to end VASP. "The VASP program is something that we do not need to be in," he said.
Collins and some other Republicans don't like the way VASP works to help vets with these troubled loans — by buying them up and rolling the missed payments into a new loan with a low 2.5 percent interest rate. They worry that puts too much taxpayer money at risk since the VA holds the new loans on its own books.
At a recent house hearing, Collins said the program was going to cost "multiple billions of dollars" going forward and that "it's a program we should have never gotten into."
Collins said he's hoping Congress passes legislation to replace VASP with what's called a "partial claim" program. That takes the homeowners' missed payments and moves that debt to the end of the homeowner's loan term. Homeowners then start paying their mortgage again with their original interest rate and monthly payment.
Loading...
VA used to have a partial claim option for veterans but it was suddenly shut down in late 2022 during the Biden administration. That, too, left thousands of vets with far worse options than other homeowners. After NPR reported on that misstep, the VA halted foreclosures for an entire year while it rolled out VASP to rescue vets from losing their homes. Now Trump's VA has scuttled that rescue program.
"We look forward to seeing how that legislation… the partial claim comes through," Collins told senators at last month's hearing.
But Democrats slammed Collins and the VA for basically ripping up the VASP safety net before anything has been set up to replace it. Congressman Chris Pappas of New Hampshire said vets facing foreclosure are left just hoping Congress will act in time.
"That's not a good enough answer for my constituent," Pappas told Collins at another recent hearing. "Veterans I talked to don't agree with the abrupt ending to VASP," Pappas said.
At the Senate hearing, Arkansas Republican John Boozman gently made that same point to Collins, asking what the VA can do for veterans right now, and for the unknown number of months that it may take for Congress to pass, and VA to set up, a new program.
"How does the VA plan to help veterans at risk of foreclosure?" Boozman asked. "You know it's one thing going forward, it's another thing for those individuals that are caught up in that now, and it makes it really difficult."
Asked by Pappas whether he would consider another foreclosure moratorium for vets, Collins replied: " I'm not gonna commit to a program on the fly here in the middle of the hearing. I understand your concern."
The mortgage program has been a real concern for veterans like the former Navy diver Matt Kelly. Kelly suffered a brain injury during his service. He still gets headaches, and a few years ago they stopped him from working for a while.
"I was getting terrible migraines," he said. " I thought I needed time to deal with my medical stuff. "
Kelly's mortgage company allowed him to pause payments and told him he'd have an affordable way to catch up later. Indeed, VASP would have done that. But then the VA shut it down, leaving Kelly panicked about losing his home, and not knowing where he'd go with his wife and three young kids.
When NPR first spoke to Kelly in April, he said he'd been up most of the previous night, worrying what to do.
"I shake uncontrollably," Kelly said. "My wife woke me up and said I was shaking. But right now I'm more pissed off and angry."
After NPR asked the VA and Kelly's mortgage company, Loancare, about his situation, the president of the company called NPR to say that, in Kelly's case, the company actually made some mistakes that led to Kelly not getting enrolled in VASP in time. He said Loancare will eat the cost and give Kelly a new, low-interest-rate loan with the same terms as VASP.
Thousands of other vets who are still behind on their loans haven't been so fortunate. Both Jon Henry and Mason Reale initially had trouble qualifying for VASP and now the program is closed so they won't get the help. Kelly says he's worried about other vets.
"It's a responsibility of the VA. They announced this program, then they canceled the program, and they're leaving veterans hanging," Kelly said, adding, "their mission to protect veterans and care for veterans is not being fulfilled."
Meanwhile, Congress is working on a replacement for the VA home loan safety net. One bill has passed in the House and two bills have been introduced in the Senate. But it's not clear how long the process of standing up a new VA safety net might take, or how many veterans will lose their homes in the meantime.
Copyright 2025 NPR
