The U.S. House passed the VA Home Loan Program Reform Act (H.R. 1815), which would establish a permanent partial claim option to help distressed veteran homeowners. 

Mortgage Banker Association (MBA) President and CEO Bob Broeksmit released a statement calling the measure “urgent” following the termination of the Veterans Affairs Servicing Purchase (VASP) program at the end of April.

“MBA has been a fierce advocate for distressed veteran homeowners, working with a bipartisan group of lawmakers, Veterans Affairs (VA) staff, and our members to help keep them in their homes since the VA’s previous loss mitigation solution was terminated during the pandemic without a replacement,” Broeksmit said.

If enacted, the law would give the VA permanent authority to create a partial claims program in alignment with loss mitigation options offered to borrowers across other federal housing agencies.

“We will continue to work with a bipartisan group of senators to get similar legislation passed as soon as possible,” Broeksmit added. “Thousands of struggling veteran homeowners risk foreclosure without this swift legislative action and subsequent implementation of a VA partial claim program.”

The program proposed by the new bill was introduced by Rep. Derrick Van Orden (R-Wis.), chair of the House Economic Opportunity Subcommittee, who was critical of the VASP program in prepared remarks concerning his measure delivered on the House floor.

He called VASP an overly expensive and risky solution to a relatively small issue within the VA Home Loan Program.

“It is my responsibility to make sure every active duty servicemember, every veteran, and every American who chooses to join the military in the future has the opportunity to use this program to fulfill the American Dream of homeownership,” he said. “However, when a series of unelected bureaucrats invented a program that had not existed since someone first lent seashells to buy a cave, they greatly endangered that.”

Van Orden’s legislation will now await passage by the Senate.