If you're a Veteran or active-duty service member with a VA-guaranteed home loan and facing foreclosure, the Veterans Affairs Servicing Purchase (VASP) program could help you keep your home. This program is designed as a last-resort option when your loan servicer determines that no other alternatives—like repayment plans, special forbearances, or loan modifications—can prevent foreclosure.

How VASP Works

Under the VASP program, the VA steps in to purchase the modified loan from your current loan servicer. A modified loan means the servicer has adjusted the loan terms to make repayment more manageable for you. Loan servicers have until October 1st to familiarize themselves with the VASP process. If your servicer is moving forward with foreclosure without considering other temporary solutions, you should contact the VA at 877-827-3702, selecting option 4 (TTY: 711), Monday through Friday, 8:00 a.m. to 6:00 p.m. ET.

VASP Program Eligibility Criteria

To qualify for the VASP program, you must meet the following requirements:

• Loan Delinquency: Your loan must be 3-60 months delinquent when submitted by your servicer.
• Occupancy: The property must be occupied by you or an immediate family member.
• Bankruptcy Status: Neither you nor anyone else listed on the loan can be in active bankruptcy at the time of submission, though dismissed or discharged bankruptcies (Chapter 13 or Chapter 7) are accepted.
• Resolution of Default: You must have resolved the issue that caused the default and be able to resume making monthly mortgage payments.
• Stable Income: You and any co-borrowers must have a stable and reliable source of income.
• First Lien Position: Your VA-guaranteed loan must be in first lien position, with no other liens or judgments that could jeopardize this status.
• Payment History: You must have made at least six monthly payments since the start of the loan or any modification.
• Ownership: You must be the legal owner of record for the property.
• Agreement to Terms: You and all other parties listed on the loan must agree to the terms of the VASP modification.

Considerations Before Opting for VASP

While loan modifications can make payments more affordable, they often result in a higher loan balance. This may reduce or eliminate your home equity. Additionally, in the current environment of rising interest rates, your modified mortgage might carry a higher rate than before. If you're already upside down on your loan, or likely will be after the modification, VASP might only be a good option if you plan to stay in your home for at least five years. If you're unsure about your long-term plans, a short sale might be a better solution to get out of the situation.