VA Home Loan Program Reform Act

The VA Home Loan Program Reform Act establishes a new "Partial Claim Program" to help veterans avoid foreclosure on VA-guaranteed home loans. Under this program, the VA can purchase up to 20% of a defaulted or at-risk loan, requiring veterans to repay the VA with 0% interest if they agree to monthly payments within a year (0.5% otherwise), while the VA receives a secondary claim on the property. The bill also amends existing law to give the VA more authority to prevent foreclosure, such as paying loan holders to avoid foreclosure and requiring loan holders to place loans in forbearance. The program expires on September 30, 2026, and includes administrative rules for processing payments and conducting audits.