The Veterans Housing Stability Act of 2025 creates a new "Partial Claim Program" to help veterans avoid losing their homes to foreclosure. Under this program, the Department of Veterans Affairs can purchase a portion of a defaulted or at-risk mortgage loan, paying the lender enough to cover missed payments and related costs like property taxes and insurance. The veteran then must repay this amount without interest when the loan matures, while the VA retains a secured interest in the property. The program is capped at 25 percent of the unpaid loan balance, though it can reach 30 percent for veterans already delinquent when the law passes or those affected by presidentially declared disasters. The bill also strengthens oversight by allowing the VA to impose civil penalties up to $27,894 on loan holders who make false statements, establishes mandatory loss mitigation procedures that lenders must follow before foreclosing, and encourages lenders to pause foreclosures while the program gets up and running. The Secretary of Veterans Affairs has broad discretion to run the program and can implement it initially through administrative guidance for up to three years.
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