The US Department of Veterans Affairs (VA) has launched the VA Partial Claim Program to aid military homeowners in avoiding foreclosure. This program, created under the VA Home Loan Program Reform Act, is designed as a foreclosure-prevention tool for VA-backed home loans only.
To qualify, the home must be the borrower's primary residence, and the borrower must be either already in default or at risk of missing mortgage payments soon. A three-month trial payment plan is required before final approval.
During the trial period, the borrower must make three consecutive on-time full mortgage payments. The VA allows only one partial claim per loan, with limited exceptions for major disasters. The program can cover up to 25% of the unpaid principal loan balance at the time of assistance, increasing to 30% for borrowers who had COVID-era hardship relief between March 1, 2020, and May 1, 2025.
A VA partial claim does not change the interest rate, monthly payment, or loan term. In contrast, a loan modification changes the loan terms, such as rate, term length, or balance. To apply, borrowers must first contact their mortgage loan servicer's loss mitigation department.
After approval, the borrower resumes normal monthly mortgage payments as before. The main mortgage is considered fully current after the partial claim is applied. The subordinate lien does not require monthly payments and does not accrue interest. The lien must be repaid in full when the home is sold, refinanced, or the mortgage is fully paid off.
The program is built to help veterans recover from temporary financial setbacks while keeping their original mortgage terms stable.
