VA Home Loan Program Reform Act 2025-03-03 Introduced in House VA Home Loan Program Reform Act

This bill authorizes the Department of Veterans Affairs (VA) to take certain actions in cases of default on home loans under the VA home loan program and establishes a partial claim program.

First, the bill authorizes the VA to pay the holder of a loan guaranteed by the VA an amount necessary to avoid the foreclosure of the loan, provided that the holder of the loan and the veteran obligated on the loan execute documents to ensure the VA obtains a secured interest in the property covered by the loan.

The VA must prescribe loss mitigation procedures to help prevent the foreclosure of such a home loan. The VA may not take specified administrative actions (e.g., consent to the modification of loan terms) until the sequence of mitigation options has been completed.

Next, the bill establishes a five-year Partial Claim Program under which the VA may make a partial claim (purchase a portion of the indebtedness) on VA loans for primary residences that are in default or at imminent risk of default. Individuals who default on loans for which the VA has made a partial claim under this program must be liable to the VA for any loss resulting from the default.

Finally, the VA must report to Congress on its strategy to ensure that veterans who purchase homes under the VA home loan program are not at a disadvantage when attempting to secure representation by a real estate agent or broker.

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