The Veterans Affairs Servicing Purchase (VASP) Program 2025 is a new initiative aimed at helping veterans, active-duty service members, and surviving spouses who are struggling with VA-backed home loans.
With a fixed 2.5% interest rate, the program provides financial relief and prevents foreclosure for eligible borrowers.
If you’re facing difficulties with your VA-guaranteed loan, this guide will walk you through the program’s benefits, eligibility requirements, and application process.
NEW VASP Program For Veterans & Spouses
The VASP Program is designed to assist borrowers in default by restructuring their loans at a lower, fixed interest rate. Here’s a quick look at the program’s key details:
| Feature | Details |
|---|---|
| Program Name | Veterans Affairs Servicing Purchase (VASP) |
| Interest Rate | Fixed 2.5% |
| Eligible Loans | VA-guaranteed home loans |
| Loan Status | Default (3 to 60 months overdue) |
| Occupancy Requirement | Owner-occupied homes only |
| Bankruptcy Status | No active bankruptcy at the time of application |
| Payment History Post-Modification | Six months of on-time payments required |
| Application Process | Borrowers identified by mortgage servicers |
| Official Website | VA VASP Program Page |
The program is an essential safety net for veterans who are at risk of losing their homes. By working with mortgage servicers, the VA ensures that eligible borrowers receive support without having to navigate the process alone.
Eligibility
To qualify for the VASP Program, borrowers must meet the following criteria:
Loan Status
The borrower’s VA-backed home loan must be in default, meaning payments are overdue by 3 to 60 months.
Occupancy Requirement
The home must be owner-occupied, meaning the borrower lives in the property.
Bankruptcy Restrictions
The borrower and any co-borrowers cannot be in active bankruptcy at the time of application.
Cause of Default Resolved
Borrowers must show that the financial hardship leading to default has been resolved, ensuring they can continue making payments under the new terms.
Stable Income
Applicants must provide proof of stable income to demonstrate their ability to make future payments.
Primary Mortgage Only
The VASP Program only applies to the primary VA loan on the property.
HOA Fees
If the property is part of a homeowner’s association, all HOA fees must be current.
Payment History Post-Modification
After loan modification, borrowers must maintain six months of on-time payments to stay in the program.
For full eligibility details, visit the VA’s VASP Program page.
How It Works
Identification by Mortgage Servicer
Borrowers cannot apply for the VASP Program on their own. Instead, mortgage servicers identify eligible individuals based on loan status and financial situation.
Submission of Request
Once identified, the servicer submits a request for loan modification to the VA.
Loan Modification
If approved, the loan is adjusted to reflect a 2.5% fixed interest rate for the remainder of its term.
Compliance and Monitoring
Borrowers must maintain a track record of six months of on-time payments after modification to continue benefiting from the program.
Key Benefits
The VASP Program offers several advantages to struggling homeowners:
- Fixed Interest Rate – The 2.5% rate remains stable throughout the loan term, making monthly payments predictable and affordable.
- Foreclosure Prevention – The program helps borrowers avoid foreclosure and keep their homes.
- Financial Stability – By lowering monthly payments, the program gives borrowers the opportunity to regain financial control.
Application Process
Borrowers do not directly apply for the VASP Program. Instead, the process works as follows:
- Contact Your Mortgage Servicer – If you are facing financial hardship, reach out to your mortgage servicer to discuss available options.
- Servicer Evaluation – The servicer will review your case and determine if you qualify for the VASP Program.
- Loan Modification Request – If eligible, the servicer submits a request for loan modification to the VA.
- Approval & Implementation – If approved, your loan terms are modified to reflect the new interest rate and repayment plan.
The VASP Program 2025 provides critical support for veterans struggling with mortgage payments. By securing a lower fixed interest rate and preventing foreclosure, it ensures financial stability for those who have served. If you believe you may qualify, reach out to your mortgage servicer as soon as possible.
