Over 10,000 Veterans Have Lost Their Homes Since the Trump Administration Shut Down a Key Mortgage Safety Net

A benefit once considered among the most valuable rewards for military service is now failing thousands of veterans when they need it most. Since May 2025, more than 10,000 veterans have lost their homes to foreclosure — and another 90,000 are at risk of the same fate.

The spike in foreclosures followed the Trump administration's decision to shut down the VA Servicing Purchase program, known as VASP, without a replacement ready to go. According to data from ICE Mortgage Technology, which tracks mortgage industry trends, the pace of VA loan foreclosures is now the highest it has been in ten years.

VA-backed home loans are a cornerstone benefit for military service members, helping millions of veterans and their families become homeowners. But for nearly a year, veterans who have fallen behind on their mortgage payments have had fewer protections and fewer options than most other American homeowners — including civilians with loans backed by Fannie Mae, Freddie Mac, or the FHA.

"We should have something in place to try to stem people from losing their homes," said Steve Sharpe, an attorney with the nonprofit National Consumer Law Center.

How the Crisis Started

The roots of this problem go back to the Biden administration. During the COVID-19 pandemic, veterans were allowed to pause, or "forbear," their mortgage payments under a special relief program. The understanding, for many veterans, was that those skipped payments would be moved to the end of their loan term and paid off when they eventually refinanced or sold their home.

But in October 2022, the Biden administration abruptly shut down the part of the program that made that deferral possible. Tens of thousands of veterans were suddenly told they owed all of their missed payments at once — in a single lump sum.

For most veterans, that amount ran into the tens of thousands of dollars. The alternative offered — refinancing at current interest rates — was equally unaffordable. Mortgage rates had climbed from around 3% to roughly 7%, which would have added as much as $1,000 or more per month to a veteran's mortgage bill.

After an NPR investigation in late 2023 exposed the problem, the VA halted foreclosures nationwide for a year and began developing a rescue program. That program — VASP — eventually gave more than 33,000 veterans new mortgages at a 2.5% interest rate, allowing them to stay in their homes.

The Program Was Shut Down Anyway

By early 2025, VASP was fully operational and helping veterans at scale. But the program didn't survive long under the new administration. On May 1, 2025, the Trump administration shut VASP down — giving mortgage servicers and even VA staff just one week's notice. Veterans already enrolled kept their lower-cost loans, but no new applications were accepted.

The mortgage industry had warned the administration this would happen. At a congressional hearing in March 2025, Elizabeth Balce of the Mortgage Bankers Association was direct about what shutting down the program without a replacement would mean.

"Foreclosure. Period. That's really where it's gonna come to," Balce warned before the House Committee on Veterans' Affairs.

Less than two months later, VASP was gone. VA officials have not explained to reporters why the agency ended the program without first putting a replacement in place.

Veterans Caught in the Middle

Thousands of veterans who had been working toward VASP enrollment never made it in time. Many were left with only one alternative: accept a loan modification at today's higher interest rates — or face foreclosure.

Army veteran Jon Henry of Kansas City, Missouri, served during the first Gulf War in a unit designed to counter chemical warfare. He fell behind on his mortgage after losing his job managing a manufacturing plant. By the time he was working again and ready to get back on track, VASP was gone. He accepted a modified loan — and now pays $380 more per month than before.

"It's a struggle," said Henry. "Especially with everything else being inflated in the country, you know, with groceries, gas … I'm like, what the hell?"

Shante Benfatto, a veteran who served in Afghanistan and is rated 100% disabled by the VA, said she and her husband spent months trying to get enrolled in VASP. Their lender didn't complete the paperwork before the VA pulled the plug. Facing foreclosure notices, the Benfattos had no choice but to accept a new loan with payments roughly $300 higher per month.

"It hurts paying $3,200 a month," Benfatto told NPR.

Her husband Mark noted that the higher payment means they often can't pay on time. "We're paying late because we can't afford to pay the extra money until the end of the month, until she gets her disability," he said. Late fees tack on an additional $105 each month.

Jerome Thomas, an Air Force veteran in Port Charlotte, Florida, saw his monthly mortgage payment jump by $800 after his interest rate more than doubled to 6.8%. He said his lender gave him no real choice.

"I told them I can't afford to pay it," Thomas said. He is now falling behind on the modified loan and receiving new foreclosure warnings. "I got my three kids in here, I've got the wife, she's a teacher … it's bad."

What Comes Next — and What It Won't Fix

The Trump administration has said it is developing a new relief program. Under the current draft, veterans who are behind on payments would be able to move missed payments to the back of their loan term, allowing them to keep their current interest rate. That could provide meaningful help to veterans who locked in low rates in prior years.

But the program is still months away from being operational. And housing advocates warn it may still leave veterans worse off than other homeowners. As currently written, the draft policy would require mortgage companies to place veterans into higher-payment modified loans if the increase is 15% or less — meaning a veteran with a $2,000 monthly mortgage could be pushed into a loan costing $300 more per month, with no option to defer missed payments instead.

Pete Mills of the Mortgage Bankers Association called out the problem in a formal letter to the VA.

"As drafted, Veterans will continue to have worse options than similarly situated non-Veterans," Mills wrote. "Payment reduction is the most important driver of modification performance, and the current policy will lead to higher redefault rates."

Mills and the association are urging the VA to restructure its options so that higher-payment loans are only offered as a last resort. "The VA should restructure the waterfall to only allow increased monthly payments as a last resort," he said.

Housing advocates are also calling on the VA to ask the mortgage industry to pause foreclosures until the new program is ready. "We're talking about a heck of a lot of folks," said Sharpe of the National Consumer Law Center.

Critically, the new program — whenever it does launch — will not help veterans like Henry, Benfatto, and Thomas who were already forced into higher-rate loan modifications. It will not reduce their monthly payments back to what they were before. Refinancing is theoretically possible if mortgage rates drop significantly, but rates have been trending upward.

One Family's Story

Leann Ledford's family in Spokane, Washington, represents what can go wrong when the system fails. Her husband is a Marine who was wounded in Afghanistan. He has PTSD and a traumatic brain injury. After years of struggling through the VA's disability approval process, his condition worsened to the point that he couldn't work. Ledford had to stop working to care for him. At one point, the family — including their young son — spent six months living out of a trailer hitched to their truck while waiting for his disability paperwork to be processed.

They eventually stabilized and bought a home in January 2021 using a VA-backed loan. The house sits across the street from their son's elementary school.

"He's been able to live over half his life in our house now, and he doesn't remember all the bad years 'cause he was too little," Ledford said.

In 2022, after a furnace replacement and other costly repairs, their lender, Freedom Mortgage, told them they could use a COVID-era forbearance program to pause their payments for a year. Ledford says she was told the missed payments would simply move to the back of the loan.

"They told us it was for a year, and they would check in after six months. And then we would just pick up our payments at the end of the year … It felt like such a relief for us," she said.

Then the Biden administration ended that option, and the Ledfords were told they owed everything at once. "And we're like, wait a minute, what?" Ledford recalled.

They couldn't afford the lump sum, and they couldn't afford the $1,000-per-month increase that refinancing would have required. They were told to keep applying for help through the VA's loss mitigation process — a process that dragged on for years and ultimately produced nothing.

When VASP launched, the Ledfords were working to get enrolled. They receive $3,971 per month in disability pay and say they could have afforded payments under the program. But they hadn't been enrolled before the VA shut VASP down in May 2025.

"I found out that [VASP] was ending and I called the VA loan technician and they didn't even know yet," Ledford said. "They had to go figure out what was going on."

Freedom Mortgage sold the Ledfords' home in a foreclosure sale. The VA now owns it. The family was told they needed to vacate by April 3, with the VA offering $3,500 in "cash for keys" as the only form of assistance.

"We didn't know that the foreclosure sale went through until somebody knocked on the front door," Ledford said.

Her husband has been struggling. He is having seizures again and was too distressed to be interviewed. "It has really impacted him, and he is really struggling," she said.

The VA issued a written statement saying it "worked tirelessly with the Ledford family to help keep them in their home" and noted that "the decision to foreclose on their mortgage was made by Freedom Mortgage." VA press secretary Pete Kasperowicz added, "Per federal law, VA's home loan program is based on the premise that while Veterans may need some assistance, they must generally be able to make their mortgage payments." Freedom Mortgage declined to comment.

The VA did not address whether it could intervene to prevent the family's eviction, given that the agency now owns the property following the foreclosure sale. The VA also did not respond to questions about why VASP was shut down without a replacement already in place. Its statement said the agency stands ready to assist the Ledfords with health care services.