Under Secretary for Benefits for the Department of Veterans Affairs Joshua Jacobs announced a new initiative aimed at assisting veterans who are struggling to maintain their homes.
The Department of Veterans Affairs revealed the Veterans Affairs Servicing Purchase (VASP) program on April 10th with the aim of helping over 40,000 Veterans avoid foreclosure.
"When a Veteran falls on hard times, we work with them and their loan servicers every step of the way to help prevent foreclosure — including offering repayment plans, loan modifications, and more," Jacobs said. "Some Veterans still need additional support after those steps, and that’s what VASP is all about. 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."
The VASP serves as a tool that the VA will employ to bolster home retention efforts for eligible Veterans and surviving spouses with guaranteed home loans. According to the plan outlined by the VA, it will purchase defaulted loans from mortgage servicers and modify these loans to set the mortgage rate at a fixed 2.5% interest rate.
Jacobs further explained that through this program, "Veterans will not apply directly, as the VA will be notified by the mortgage servicers of which borrowers are qualified for the benefits beginning on May 31." The VA anticipates that this new program will curtail government subsidy spending by over $1.5 billion from 2024 to 2033 in order to provide more benefits for Veterans and taxpayers.
