Keeping veterans and their families in their homes is the goal of a new Veterans Affairs, or VA, program that's launching later this month.
The program, called the Veterans Affairs Servicing Purchase Program (VASP), is designed to "help more than 40,000 Veterans experiencing severe financial hardship avoid foreclosure and stay in their homes," according to the Department of Veterans Affairs.
However, before talking about VASP and the home retention options available for veterans, it's important to give context about what has happened over the last few years.
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Steve Sharpe, a senior attorney at the National Consumer Law Center (NCLC), tells me veterans who lost income during the pandemic were given mortgage relief and could skip payments.
However, the VA ended the COVID forbearance program in the middle of the pandemic. When that happened, people were left without options.
Sharpe says many veterans feared losing their homes and took modifications to change their loan terms. When they did that, they agreed to the current high interest rates as opposed to the low ones they were paying during the pandemic.
"The sharp increase in interest rates that occurred about two and a half years ago have actually affected what's available for people when they fall behind," he said.
He says when people were in an elevated interest rate environment, "it really caused the tools that we've been relying on to not work as well. And so, that's why VA needed to create something else."
Hence VASP, the new program.
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Advocates like Sharpe have been pushing for more financial support for veterans for quite some time.
He, along with the folks at the NCLC, wants the VA to extend a foreclosure pause until VASP is widely available to everyone. The pause is set to expire on May 31.
"We believe that VA should extend that foreclosure pause even longer to make sure everyone has the chance who needs this program, to at least access it, and for servicers to consider whether borrowers are eligible for it," he said. "That may take more time than May 31."
He predicts the program will be fully functioning around October.
According to the VA, veterans who are able to access the program before May 31 will have a fixed 2.5% interest rate and more affordable payment options.
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"This new program will help more than 40,000 Veterans and their families stay in their homes, and there’s nothing more important than that," said VA Secretary Denis McDonough in a press release. "We at VA are committed to doing everything in our power to help Veterans avoid foreclosure, and that’s exactly why we’re launching VASP – to help the Veterans who need it most.”
I asked Senator Tim Kaine—who's been outspoken about military housing challenges—about VASP. He tells me he hasn’t seen all the programs yet, but he has been assured they are on the way.
"I'm glad we were able to convince the VA to slow down the termination of this program," he says. “If it’s a challenge, we're going to try to work individually with folks to help them out.”
