Below, we explain what changed, which trial plans can finish, and what to do next if you were counting on VASP. We also cover current VA loss mitigation options and how this change affects purchases and refinances, with links to official guidance and practical steps to stay protected.
Key Takeaways
- VASP is closed to new submissions as of May 1, 2026, per VA guidance.
- Trial payment plans approved before May 1 may continue and settle under wind down rules.
- No new applications are accepted; servicers must use repayment plans, modifications, and other standard options.
- Program closure does not affect VA purchase or refinance eligibility; underwriting and funding fee rules remain.
- Act immediately with your servicer; timely payments and documentation protect modification decisions and completion.
- Use official VA, HUD, and CFPB resources for counseling, timelines, and step by step help.
Is the VA Servicing Purchase (VASP) program closed?
Yes. The VA Servicing Purchase program is closed to new cases. VA stopped accepting submissions on May 1, 2026. If your trial payment plan was approved before that date, it may still finish under wind-down guidance. No new applications are taken; remaining approved cases are processed to conclusion if requirements and funding are satisfied. Servicers will follow VA’s published procedures.
- VASP’s closure means borrowers cannot newly apply for the VA to purchase their delinquent loans, but previously approved files may still finish if milestones are met and funding remains available.
- The program once offered a last-resort path to restructure payments by transferring the loan to VA, yet today the emphasis returns to standard retention options administered through mortgage servicers.
- Borrowers who never entered a trial payment plan before the cutoff must now pursue repayment plans, modifications, or other conventional workouts rather than expect a VA loan purchase outcome.
- For clarity, the shutdown only stops new intake; it does not retroactively cancel approvals already granted, nor does it change how new purchase or refinance applications are underwritten.
What happens if I was already in a VASP trial payment plan?
Trial plans approved before May 1, 2026 can continue and, if completed successfully, convert to a permanent modification under VA’s wind-down. Your job is simple, make each trial payment on time, respond quickly to any document requests, and keep confirmations. Servicers will finalize eligible cases when milestones are met and funds remain available. Ask for written status updates regularly, please.
- Keep every trial payment on time because a single miss can delay or derail conversion, forcing the servicer to reassess eligibility and potentially require a new review under different criteria.
- Respond to all documentation requests quickly, including income, hardship, insurance, tax, and occupancy proofs, organizing files clearly so processing teams can verify details without repeated follow ups.
- Track milestones such as trial start, trial completion, purchase decision, and final boarding, and request written confirmations so your records align with the servicer’s system timelines and notes.
- If communication stalls, escalate politely through the servicer’s resolution channels, reference dates and documents precisely, and keep notes to preserve continuity when agents or departments change.
Why did VA end VASP and what changed?
VA ended VASP because it was a temporary, pandemic-era tool and the agency is returning focus to standard loss-mitigation through servicers. On May 1, 2026, VA rescinded the Home Retention Waterfall and stopped new VASP intake. Complex administration and limited funding further supported winding down while maintaining conventional options that remain available nationwide. Those tools continue under updated policy guidance.
- The initiative addressed exceptional pandemic related delinquencies, but as conditions normalized, VA determined traditional retention methods could manage most hardships without the agency directly purchasing distressed loans.
- Operational complexity and resource demands made the structure difficult to sustain at scale, especially when servicers already maintain established processes for reviewing hardships and implementing sustainable workout solutions.
- Ending the waterfall restored a simpler decision path, encouraging earlier customer contact, cleaner documentation, and faster resolutions under familiar programs with clearer eligibility criteria and responsibilities for each party.
- Borrowers still have avenues to keep homes; the change mainly alters who holds the loan and which tool is used rather than eliminating opportunities to achieve an affordable payment.
What options replace VASP now?
With VASP closed, servicers use standard VA retention options to help borrowers keep homes. Expect solutions like repayment plans spreading arrears, loan modifications adjusting rate or term, short-term special forbearance during hardship, and, where available, partial claim structures. Early contact, complete documentation, and realistic budgeting remain decisive for approvals, sustainable payments, and long-term homeownership success after temporary financial setbacks today.
- Repayment plans spread missed amounts over future months, raising the regular payment temporarily but avoiding immediate large reinstatement sums and keeping momentum toward restoring the account to current.
- Loan modifications adjust interest rate, term length, or other elements to reduce monthly cost permanently, which can be more effective than temporary fixes when incomes have meaningfully changed.
- Short term special forbearance pauses or reduces payments during a documented hardship, buying time to stabilize employment, complete medical recoveries, or resolve other setbacks that disrupt cash flow.
- Partial claim approaches, when available, move arrears to a separate balance due later, preserving affordability today while deferring repayment until payoff, refinance, or property transfer in the future.
How does the closure affect my ability to buy or refinance with a VA loan?
It does not affect your ability to buy or refinance with a VA loan. VASP governed delinquent loan servicing, not new originations. For purchases and refinances, eligibility still depends on entitlement, credit profile, residual income, and property condition. Focus on documentation, stable income, manageable debts, and realistic pricing, rather than the servicing program’s wind-down mechanics. Those fundamentals drive approvals consistently.
- Prepare by reviewing income stability, employment history, and obligations, then confirm that expected payments fit comfortably within your monthly budget, leaving room for savings and lifestyle needs.
- Strengthen your file with clean bank statements, timely payments across accounts, and sensible credit utilization, showing consistent behavior that indicates reliability and resilience across economic conditions.
- Understand the property’s condition and maintenance needs early, budgeting for repairs or renovations so total housing costs remain sustainable even after closing and initial move in expenses.
- Coordinate timelines thoughtfully, aligning contract dates, rate locks, and appraisal scheduling to minimize surprises and help the transaction progress smoothly from application to closing day.
What should I do today if I am behind or expect trouble?
Act immediately. Contact your servicer, explain the hardship clearly, and provide recent income and expense details. Request a review for repayment plans, modifications, or short-term forbearance, and ask for timelines in writing. Protect yourself by making any agreed payments on time, keeping copies of documents, and escalating respectfully if communication stalls or deadlines slip unexpectedly. Early action preserves better outcomes.
- Draft a simple hardship letter summarizing the cause, steps taken to recover, and expected timeline, then attach recent pay stubs and a realistic budget that demonstrates sustainability after assistance.
- Set calendar reminders for payments and follow ups, using checklists to track what you sent, whom you spoke with, promised callbacks, and the exact dates milestones should occur.
- If a payment will be late, notify the servicer before the due date, propose a catch up plan, and document the conversation in writing to avoid misunderstandings or penalties later.
- Beware of scams promising instant fixes; legitimate solutions require documentation, clear math, and servicer involvement rather than upfront fees or pressure to sign unclear agreements.
VASP timeline and current wind-down status
VASP launched in 2026, then closed to new submissions on May 1, 2026, and entered wind-down. Approved trial payment plans could continue for a limited period, with purchases possible upon successful completion and available funding. Today, no new cases are taken; remaining eligible files proceed toward resolution under established procedures and defined operational milestones. Borrowers should confirm dates and steps.
- The practical path begins with trial payments, then moves to a purchase decision, legal documentation, and final boarding, when servicing transfers into its long term configuration.
- During wind-down, servicers reconcile checklists, verify data, and close gaps before forwarding files for final determinations, which helps ensure accuracy and reduces post closing corrections later.
- Borrowers should monitor expected milestones, politely request status updates, and keep payment receipts and correspondence so any discrepancies can be resolved promptly with clear evidence.
- When every requirement is satisfied, finalized cases move into their long term status, and borrowers continue making payments normally under the newly established terms and servicing setup.
Common pitfalls during the wind-down and how to avoid them
The top pitfalls are missed trial payments, incomplete documents, unclear hardship explanations, and assuming processes move automatically. Avoid them by calendarizing payment dates, responding promptly to requests, sending organized packets, and confirming receipt in writing. Track every promise, escalation, and milestone. If something slips, speak up early firmly and document the correction so your case remains eligible and on schedule.
- Do not assume a submitted document was received or readable; send legible copies, include loan identifiers on every page, and ask for acknowledgment so teams can match items quickly.
- Keep explanations concise and consistent; conflicting statements across forms, emails, and calls create delays and cause rework, reducing the odds of timely approvals or scheduled conversions.
- Guard the budget during review; new debts or large discretionary purchases can jeopardize affordability calculations and invite reconsideration of outcomes you expected to remain firmly on track.
- Document corrections thoroughly; when mistakes occur, a clear record of what changed, who confirmed it, and when it happened prevents issues from resurfacing later in the process.
What should servicers be doing, and what can you expect?
Servicers should follow VA wind-down procedures, communicate timelines, and request only necessary documentation. You should expect clear instructions, prompt acknowledgment of submissions, and transparency about eligibility and next steps. Professionals may escalate issues internally when delays occur. Your steady payments, organized records, and consistent communication help servicers validate completion and finalize decisions within the required operational windows efficiently and accurately.
- Expect a structured sequence of requests rather than scattershot outreach; this signals disciplined processing and helps you prepare the right documents in one organized package.
- Professional teams will timestamp submissions, track workflows, and flag missing items quickly, enabling faster corrections and reducing the chance of last minute surprises before critical milestones.
- When concerns arise, courteous persistence paired with detailed notes typically produces cooperation; good records transform vague conversations into specific actions with accountable deadlines.
- Servicers aim to conclude eligible cases predictably; your timely participation, truthful disclosures, and stable payments often make the difference between smooth closure and lingering uncertainty.
Which key terms should I understand during the wind-down?
You will hear terms like trial payment plan, conversion, purchase decision, boarding, waterfall, and partial claim. Understand that each describes a step from temporary payments to a finalized resolution. Knowing definitions helps you track progress, ask the right questions, and quickly fix issues so your case moves forward without unnecessary delays or confusion during the wind-down period from all parties.
- Trial payment plan means a temporary period of scheduled payments that demonstrates you can afford the proposed terms, providing evidence needed to approve conversion to a permanent arrangement.
- Conversion indicates the successful shift from trial status to a lasting modification or restructured loan, after all conditions are met and internal reviews confirm the file is complete.
- Purchase decision refers to the determination previously made under VASP about whether VA would acquire the loan after a successful trial, subject to eligibility rules and available funding.
- Boarding describes the transfer and setup of a loan within its long term servicing system, including payment schedules, statements, contact points, and future customer service processes.
Your Next Steps…
If you were approved for a VASP trial plan, keep every payment on time, answer servicer requests quickly, and confirm conversion milestones.
If you were not submitted before May 1, immediately ask about repayment plans or a modification and get a HUD counselor involved.
For purchases or refinances, ignore VASP noise and focus on eligibility, residual income, and property condition to move forward confidently.
Veteran Resources
VASP Program FAQs
Is VASP closed to new cases?
Yes. VA stopped accepting new VASP submissions on May 1, 2026. The program is in wind-down. Previously approved cases may still complete if required milestones are met and funds are available, but no new applications are being taken.
What if I already started a trial payment plan?
If your trial plan was approved before the cutoff, continue making payments on time and respond quickly to requests. Eligible cases can still convert under wind-down procedures, provided milestones are met and funding remains available for purchases.
Why did VA end the program?
VASP was designed as a temporary, pandemic-era solution. VA is refocusing on standard retention through servicers. Complexity, resource constraints, and the return to conventional options drove the decision to end new intake and wind down remaining files.
Does this change my ability to buy a home with a VA loan?
No. VASP affected delinquent loan servicing, not purchase eligibility. Buying still depends on entitlement, credit, residual income, and property condition. Focus on documentation, affordability, and stable budgeting rather than wind-down mechanics.
What should I do if I am behind on payments now?
Call your servicer immediately, explain your hardship, and provide income and expense details. Ask about repayment plans, modifications, or short-term forbearance. Keep records, make agreed payments on time, and escalate politely if timelines slip.
What documents should I prepare for a workout review?
Prepare recent pay stubs, tax forms, bank statements, a written hardship letter, and a realistic monthly budget. Organized documentation accelerates review, limits back-and-forth, and improves the odds of receiving a sustainable payment solution.
Could one missed trial payment derail my conversion?
Yes. A missed trial payment can delay or jeopardize conversion. Notify your servicer immediately if a disruption is unavoidable, propose a path to cure, and document the conversation to preserve your eligibility.
How long should I wait for status updates during wind-down?
Request written updates aligned with known milestones, such as trial completion and purchase decision checkpoints. If commitments or dates pass without updates, follow up politely, reference prior communications, and request a clear next action.
What pitfalls delay approvals most often?
Late trial payments, incomplete documents, inconsistent hardship explanations, and assuming submissions were received without confirmation. Avoid delays by using checklists, requesting acknowledgments, and keeping precise records of payments, uploads, and conversations.
Will standard retention options still be available after wind-down?
Yes. Servicers will continue using repayment plans, loan modifications, and short-term forbearance to help eligible borrowers. Early contact, clear documentation, and steady follow through remain the best ways to secure a sustainable outcome.
The VA Loan Network Editorial Team is comprised of dedicated mortgage specialists and financial writers committed to providing veterans and service members with accurate, up-to-date information on VA loan benefits, eligibility, and the home-buying process.
