Guide
VA Extends COVID Forbearance Through Summer 2025
VA's COVID forbearance program has been extended through summer 2025, but the VASP program stopped accepting new applicants on May 1, 2025. If you were approved for a Trial Payment Plan before this date, it continues until August 31, 2025. The foreclosure moratorium ended December 31, 2024, requiring new solutions for Veterans facing financial hardship.
Next step:
Check Your VA Loan Eligibility
Current Status of Relief Programs
- VASP Closure: VASP ended for new enrollees on May 1, 2025, closing a key relief option.
- Trial Plans: Approved Trial Payment Plans continue through August 31, 2025, with processing by September 30.
- Foreclosure Moratorium: The moratorium ended December 31, 2024, pushing for new permanent solutions.
- Interest Rate: VASP loans restructured at a fixed 2.5% interest rate before closure.
New Legislative Relief
- Partial Claim: Allows deferring up to 30% of unpaid principal to the loan term's end.
- Loss Mitigation: Servicers must evaluate relief options before foreclosure, ensuring Veterans get help.
- Safety Net: The VA Home Loan Program Reform Act provides a permanent safety net for Veterans.
- Program Reform: Signed into law on July 30, 2025, replacing temporary pandemic-era programs.
Options if Still Struggling
- Contact Servicer: Inquire about VA Home Retention Waterfall options like repayment plans and modifications.
- HAF Grants: State-administered grants cover past-due mortgage payments and property taxes.
- VA Technician: Call 877-827-3702 for guidance on repayment plans and modifications.
- HUD Counselor: Find a HUD-approved counselor to assist with applications and relief options.
Common Misconceptions
- Myth: Forbearance pauses payments but does not erase them; they must be repaid or resolved through options like repayment plans or loan modifications.
- Reality: Forbearance pauses payments but does not erase them; they must be resolved later.
- Fix: Plan exit strategies before forbearance ends, such as applying for a repayment plan or loan modification, to manage missed payments effectively.
Frequently Asked Questions
What happens if I missed the VASP deadline?
If you missed the VASP deadline, explore VA Home Retention Waterfall options, including repayment plans, loan modifications, and the VA Partial Claim Program. Contact your servicer and consider state-administered HAF grants for additional support.
How does the Partial Claim Program work?
The Partial Claim Program allows deferring up to 30% of unpaid principal to the loan's end. This helps manage missed payments without immediate financial strain. Check eligibility with your servicer.
What should I do if facing foreclosure?
If facing foreclosure, contact your servicer immediately to discuss relief options. Utilize VA Loan Technician support at 877-827-3702. Consider HUD-approved counseling for personalized assistance.
The Bottom Line Up Front
If you have a VA-guaranteed mortgage and you are struggling to make payments, you have multiple paths to keep your home — but you need to act before protections expire and program funding dries up.
VA mortgage relief is not one program. It is a set of tools — forbearance, repayment plans, loan modifications, state-run HAF grants, and the VA Streamline Refinance (IRRRL) — each designed for a different stage of financial hardship. The key is matching the right tool to your situation and moving before deadlines close.
The VA’s COVID-era foreclosure prevention programs expanded the safety net for Veterans who fell behind. Some of those programs have already ended or are winding down. If you are currently in forbearance or considering it, the exit strategy matters as much as the pause itself.
Process Watchpoint
Do not wait until forbearance ends to explore your options. Contact your servicer at least 60 days before your forbearance period expires. The VA Loan Technician line at 877-827-3702 provides free guidance and can help you evaluate repayment plans, modifications, and refinance eligibility.
How VA Mortgage Forbearance Works
Forbearance lets you pause or reduce your monthly mortgage payment for a set period when you are facing financial hardship. The VA program, originally authorized under the CARES Act in 2020, allowed Veterans with VA-backed mortgages to request up to 360 days of forbearance plus a potential 180-day extension.
The mechanics are straightforward. You call your servicer, explain your hardship, and they place your loan in forbearance. During that period, you either make no payments or reduced payments. The missed amounts do not disappear — they get addressed through one of the exit options covered below.
What Forbearance Does and Does Not Do
- Pauses or reduces monthly payments for up to 540 days total (360 + 180 extension)
- Suspends foreclosure proceedings during the forbearance period
- Does not erase the debt — missed payments must be resolved afterward
- Does not automatically damage your credit score, though pre-existing late payments remain
- Does not change your interest rate, loan term, or loan balance on its own
The critical detail most Veterans miss: forbearance is a pause, not a solution. The real work happens when forbearance ends and you need to address the accumulated missed payments. That is where foreclosure risk becomes real if you do not have a plan.
Your Options When Forbearance Ends
This is where the file gets complicated. When forbearance expires, you need one of these exit paths. Each one has different qualification rules, credit implications, and long-term costs.
| Exit Option | How It Works | Best For | Credit Impact |
|---|---|---|---|
| Repayment Plan | Resume normal payments plus extra each month until caught up | Income has recovered, can afford higher payments temporarily | Minimal if payments stay current |
| Loan Modification | Servicer adjusts rate, term, or capitalizes missed payments into the balance | Cannot afford pre-forbearance payment, need a permanent reduction | May be reported as modified; varies by servicer |
| HAF Grant | State-administered grant covers past-due amounts, taxes, or insurance | Behind on payments and need lump-sum catch-up without taking on more debt | No credit impact — it is a grant |
| IRRRL Refinance | Streamline refinance replaces current loan at a lower rate | Rate has dropped since original loan, delinquency can be resolved first | New mortgage appears; old one shows paid off |
| VA Compromise Sale | Sell the home for less than owed with VA approval | Cannot keep the home, owe more than it is worth | Significant negative impact, but less than foreclosure |
Relief Options Beyond Forbearance
Forbearance is the most visible program, but the VA and state governments offer several other tools that can work independently or in combination.
Loan Modification
A loan modification permanently changes your mortgage terms to lower the monthly payment. The VA’s COVID-19 Refund Modification has been a common path for Veterans who fell behind during the pandemic — it rolls missed payments into the balance and can extend the loan term to reduce the monthly obligation. Your income needs to support the modified payment, and the servicer will evaluate that before approving.
Homeowner Assistance Fund (HAF)
HAF is the most underused tool in this toolkit. It is a federally funded, state-administered grant program that can cover past-due mortgage payments, property taxes, insurance, and even utility arrears. The money does not need to be repaid. Each state runs its own version with different income limits, maximum grant amounts, and application processes.
Check your state’s program at NCSHA’s HAF directory. Some states have already exhausted their allocations, while others still have funding available. Timing matters here.
VA Streamline Refinance (IRRRL)
If your current rate is higher than what is available today, the Interest Rate Reduction Refinance Loan can lower your monthly payment with minimal documentation. The funding fee on an IRRRL is just 0.50%, and it can be rolled into the new loan balance. The catch: you typically need to be current on your mortgage or have resolved any delinquency before the IRRRL can close.
A common two-step approach is to use a loan modification to cure the delinquency, then follow up with an IRRRL once you have 6 to 12 months of on-time payment history under the modified terms.
Deal Saver
If you used forbearance and are now current, the IRRRL may still be available. Many lenders will consider seasoning of 6 months of on-time payments after forbearance exit. Ask your lender specifically about post-forbearance IRRRL eligibility — policies vary by lender.
VASP (Veterans Affairs Servicing Purchase)
VASP was introduced in May 2024 as an emergency measure. The VA purchased defaulted loans from servicers and restructured them at a 2.5% fixed rate. However, the VA announced that VASP stopped accepting new enrollees as of May 1, 2025. If you missed that window, the modification and HAF paths described above are your primary alternatives.
VA Compromise Sale
If you cannot keep the home and owe more than it is worth, the VA compromise sale program allows you to sell the property for less than the outstanding balance with VA approval. This is a last resort — it avoids foreclosure on your record but does carry significant credit consequences.
Who Qualifies for VA Mortgage Relief
Eligibility requirements vary by program, but the baseline is consistent across most VA relief options.
General Eligibility Requirements
- Hold a VA-guaranteed or VA-held mortgage
- Demonstrate financial hardship — job loss, medical expenses, income reduction, or increased costs
- Use the property as your primary residence (active-duty relocations may have exceptions)
- For some programs (COVID-19 Refund Modification), the loan should have been current or less than 30 days delinquent as of March 1, 2020
The hardship documentation does not need to be extensive. A letter explaining your situation, recent pay stubs or benefit statements, and a completed loss mitigation application from your servicer is typically enough to start the process. Your credit score matters less here than your ability to demonstrate hardship and recovery potential.
What Should You Check on Your Credit Report?
Forbearance itself should not appear as a derogatory mark on your credit report. Under the CARES Act protections, servicers were required to report accounts in forbearance as current if you were current when forbearance began. But the real world does not always match the rule book.
Some servicers have reported post-forbearance modifications or payment plan setups in ways that triggered credit score drops. Others have reported accounts as delinquent during the transition period between forbearance and modification. If you see inaccurate reporting, dispute it with all three bureaus and file a complaint with the CFPB.
Approval Watchpoint
Pull your credit reports monthly while you are in any relief program. Incorrect reporting can drop your score 80 to 100 points and take months to resolve. The earlier you catch it, the faster the correction. Check all three bureaus at annualcreditreport.com.
Building Your Exit Strategy
The biggest mistake Veterans make with forbearance is treating it as the solution instead of a bridge. Here is how to build a real exit strategy.
Steps to Take Now
- Call your servicer — discuss all available options before your forbearance period ends
- Apply for your state HAF program — grants can cover several months of missed payments
- Calculate whether your income supports the pre-forbearance payment or if you need a modification
- Contact the VA Loan Technician line at 877-827-3702 for free counseling
- Pull your credit reports and dispute any inaccurate reporting from your servicer
- If your rate is above current market rates, ask your lender about IRRRL eligibility
If your debt-to-income ratio has changed significantly since you originally qualified, a modification may be the most practical path. The goal is to land on a payment you can sustain, not just one that gets you through the next three months.
Veterans who combine multiple tools — for example, a HAF grant to cure the arrearage followed by a loan modification to lower the ongoing payment — often end up in a stronger position than those who rely on a single program. Your qualifying income and current expenses will determine which combination makes sense for your file.
Check Your VA Loan Eligibility
How Foreclosure Protection Timelines Work
The VA implemented a foreclosure moratorium during the COVID-19 pandemic that has been extended multiple times. Understanding where these protections stand is critical if you are currently behind on payments.
Even when the moratorium expires, the VA requires servicers to exhaust all loss mitigation options before proceeding to foreclosure. That means your servicer must offer you a repayment plan, modification, or other workout option and give you time to respond before initiating foreclosure proceedings.
The VA foreclosure moratorium has provided extended protection, but it is not permanent. If you are relying on the moratorium to buy time, use that time to get into a modification or repayment plan that resolves the arrearage. Waiting until protections expire without a plan is how Veterans lose homes.
Scam Protection for Veterans in Hardship
Veterans in financial distress are prime targets for mortgage relief scams. The pattern is predictable: an unsolicited call or mailer offering to negotiate with your servicer, modify your loan, or stop foreclosure — for a fee. Legitimate VA programs are free. Your servicer is required to work with you directly at no charge.
Red Flags
- Anyone charging upfront fees for mortgage relief or modification services
- Requests to make payments to a third party instead of your servicer
- Pressure to sign documents you have not read or do not understand
- Claims that they have special access to VA programs or insider contacts
- Demands to stop communicating with your servicer
If you encounter a suspicious offer, report it to your servicer, the VA, or the FTC. The predatory lending warning signs that apply to purchase loans apply equally to relief and modification scams.
The Bottom Line
VA mortgage relief programs exist to keep Veterans in their homes, but they only work if you engage with them before your options narrow.
Forbearance buys time. Loan modifications and HAF grants solve the underlying problem. The IRRRL can lower your ongoing costs once you are current. The worst outcome is doing nothing — letting forbearance expire without a plan, missing the HAF application window, or ignoring servicer outreach until foreclosure proceedings begin.
Call your servicer, explore every option, and use the VA Loan Technician line at 877-827-3702 as a free resource. The programs are there. The deadlines are real. Move now.
Frequently Asked Questions
What is VA mortgage forbearance?
It is a program that lets Veterans with VA-guaranteed mortgages pause or reduce their monthly payments for up to 360 days, with a potential 180-day extension. You are not forgiven the debt — you resolve the missed payments through a repayment plan, modification, or grant when the forbearance period ends.
Who qualifies for VA forbearance?
Any Veteran with a VA-guaranteed home loan who is experiencing financial hardship. You need to contact your servicer and explain your situation. Primary residence occupancy is generally required, though active-duty relocations may qualify for exceptions.
Will forbearance hurt my credit?
Forbearance itself should not appear as a derogatory mark. Under CARES Act protections, servicers must report accounts in forbearance as current if you were current when you entered. However, some servicers have misreported — monitor your reports and dispute any errors.
What is the Homeowner Assistance Fund?
HAF is a federally funded, state-administered grant program that can cover past-due mortgage payments, property taxes, and insurance. Grants do not need to be repaid. Availability and amounts vary by state.
Can I refinance my VA loan after forbearance?
Yes, in many cases. The VA Streamline Refinance (IRRRL) may be available after you resolve the delinquency and establish a payment history. Most lenders look for 6 to 12 months of on-time payments after forbearance exit.
What happened to the VASP program?
VASP stopped accepting new enrollees as of May 1, 2025. The program allowed the VA to purchase defaulted loans and restructure them at a 2.5% fixed rate. Veterans who missed this window should explore loan modifications, HAF grants, or IRRRL refinancing as alternatives.
What happens if I cannot pay after forbearance ends?
Your servicer must offer you loss mitigation options — repayment plan, modification, or other workout — before initiating foreclosure. Contact your servicer and the VA Loan Technician line at 877-827-3702 before your forbearance period expires to evaluate your options.
How do I avoid mortgage relief scams?
Never pay upfront fees for modification or relief services. Never make mortgage payments to a third party. All legitimate VA programs are free. Contact your servicer directly or call the VA at 877-827-3702 if you receive unsolicited offers.
